[Title 17 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2006 Edition]
[From the U.S. Government Printing Office]
[[Page i]]
17
Part 240 to End
Revised as of April 1, 2006
Commodity and Securities Exchanges
________________________
Containing a codification of documents of general
applicability and future effect
As of April 1, 2006
With Ancillaries
Published by
Office of the Federal Register
National Archives and Records
Administration
A Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 17:
Chapter II--Securities and Exchange Commission
(Continued) 3
Chapter IV--Department of the Treasury 95
Finding Aids:
Material Approved for Incorporation by Reference........ 1029
Table of CFR Titles and Chapters........................ 1031
Alphabetical List of Agencies Appearing in the CFR...... 1049
Table of OMB Control Numbers............................ 1049
List of CFR Sections Affected........................... 1065
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----------------------------
Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 17 CFR 240.0-1
refers to title 17, part
240, section 0-1.
----------------------------
[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
volume.
LEGAL STATUS
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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OBSOLETE PROVISIONS
Provisions that become obsolete before the revision date stated on
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INCORPORATION BY REFERENCE
What is incorporation by reference? Incorporation by reference was
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This material, like any other properly issued regulation, has the force
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What is a proper incorporation by reference? The Director of the
Federal Register will approve an incorporation by reference only when
the requirements of 1 CFR part 51 are met. Some of the elements on which
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(a) The incorporation will substantially reduce the volume of
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(b) The matter incorporated is in fact available to the extent
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(c) The incorporating document is drafted and submitted for
publication in accordance with 1 CFR part 51.
Properly approved incorporations by reference in this volume are
listed in the Finding Aids at the end of this volume.
What if the material incorporated by reference cannot be found? If
you have any problem locating or obtaining a copy of material listed in
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the revision dates of the 50 CFR titles.
[[Page vii]]
REPUBLICATION OF MATERIAL
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Raymond A. Mosley,
Director,
Office of the Federal Register.
April 1, 2006.
[[Page ix]]
THIS TITLE
Title 17--Commodity and Securities Exchanges is composed of three
volumes. The first volume containing parts 1 to 199, comprises Chapter
I--Commodity Futures Trading Commission. The second volume contains
Chapter II--Securities and Exchange Commission, parts 200 to 239. The
third volume, comprising part 240 to end, contains the remaining
regulations of the Securities and Exchange Commission, and Chapter IV--
Department of the Treasury. The contents of these volumes represent all
current regulations issued by the Commodity Futures Trading Commission,
the Securities and Exchange Commission, and the Department of the
Treasury as of April 1, 2006.
The OMB control numbers for the Securities and Exchange Commission
appear in Sec. 200.800 of Chapter II. For the convenience of the user,
Sec. 200.800 is reprinted in the Finding Aids section of the volume
containing part 240 to end.
For this volume, Robert J. Sheehan was Chief Editor. The Code of
Federal Regulations publication program is under the direction of
Frances D. McDonald, assisted by Alomha S. Morris.
[[Page 1]]
TITLE 17--COMMODITY AND SECURITIES EXCHANGES
(This book contains part 240 to end)
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Part
chapter ii--Securities and Exchange Commission (Continued).. 240
chapter iv--Department of the Treasury...................... 400
[[Page 3]]
CHAPTER II--SECURITIES AND EXCHANGE COMMISSION (CONTINUED)
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Part Page
240 General rules and regulations, Securities
Exchange Act of 1934.................... 5
241 Interpretative releases relating to the
Securities Exchange Act of 1934 and
general rules and regulations thereunder 526
242 Regulations M, SHO, ATS, AC, and NMS and
customer margin requirements for
security futures........................ 532
243 Regulation FD............................... 584
244 Regulation G................................ 586
245 Regulation blackout trading restriction..... 588
248 Regulation S-P: Privacy of consumer
financial information................... 594
249 Forms, Securities Exchange Act of 1934...... 613
249a Forms, Securities Investor Protection Act
of 1970 [Reserved]
249b Further forms, Securities Exchange Act of
1934.................................... 631
250 General rules and regulations, Public
Utility Holding Company Act of 1935..... 632
251 Interpretative releases relating to the
Public Utility Holding Company Act of
1935 and general rules and regulations
thereunder.............................. 676
256 Uniform system of accounts for mutual
service companies and subsidiary service
companies, Public Utility Holding
Company Act of 1935..................... 677
257 Preservation and destruction of records of
registered public utility holding
companies and of mutual and subsidiary
service companies....................... 695
259 Forms prescribed under the Public Utility
Holding Company Act of 1935............. 702
260 General rules and regulations, Trust
Indenture Act of 1939................... 706
261 Interpretative releases relating to the
Trust Indenture Act of 1939 and general
rules and regulations thereunder........ 724
[[Page 4]]
269 Forms prescribed under the Trust Indenture
Act of 1939............................. 724
270 Rules and regulations, Investment Company
Act of 1940............................. 727
271 Interpretative releases relating to the
Investment Company Act of 1940 and
general rules and regulations thereunder 887
274 Forms prescribed under the Investment
Company Act of 1940..................... 890
275 Rules and regulations, Investment Advisers
Act of 1940............................. 898
276 Interpretative releases relating to the
Investment Advisers Act of 1940 and
general rules and regulations thereunder 932
279 Forms prescribed under the Investment
Advisers Act of 1940.................... 933
281 Interpretative releases relating to
corporate reorganizations under Chapter
X of the Bankruptcy Act................. 934
285 Rules and regulations pursuant to section
15(a) of the Bretton Woods Agreements
Act..................................... 934
286 General rules and regulations pursuant to
section 11(a) of the Inter-American
Development Bank Act.................... 936
287 General rules and regulations pursuant to
section 11(a) of the Asian Development
Bank Act................................ 938
288 General rules and regulations pursuant to
section 9(a) of the African Development
Bank Act................................ 940
289 General rules and regulations pursuant to
section 13(a) of the International
Finance Corporation Act................. 942
290 General rules and regulations pursuant to
section 9(a) of the European Bank for
Reconstruction and Development Act...... 944
300 Rules of the Securities Investor Protection
Corporation............................. 946
301 Forms, Securities Investor Protection
Corporation............................. 952
[[Page 5]]
PART 240_GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934
--Table of Contents
Subpart A_Rules and Regulations Under the Securities Exchange Act of
1934
Rules of General Application
Sec.
240.0-1 Definitions.
240.0-2 Business hours of the Commission.
240.0-3 Filing of material with the Commission.
240.0-4 Nondisclosure of information obtained in examinations and
investigations.
240.0-5 Reference to rule by obsolete designation.
240.0-6 Disclosure detrimental to the national defense or foreign
policy.
240.0-8 Application of rules to registered broker-dealers.
240.0-9 Payment of fees.
240.0-10 Small entities under the Securities Exchange Act for purposes
of the Regulatory Flexibility Act.
240.0-11 Filing fees for certain acquisitions, dispositions and similar
transactions.
240.0-12 Commission procedures for filing applications for orders for
exemptive relief under Section 36 of the Exchange Act.
240.3a1-1 Exemption from the definition of ``Exchange'' under Section
3(a)(1) of the Act.
240.3a4-1 Associated persons of an issuer deemed not to be brokers.
240.3a4-2 Exemption from the definition of ``broker'' for bank
calculating compensation for effecting transactions in
fiduciary accounts.
240.3a4-3 Exemption from the definition of ``broker'' for bank effecting
transactions as an indenture trustee in a no-load money market
fund.
240.3a4-4 Exemption from the definition of ``broker'' for small bank
effecting transactions in investment company securities in a
tax-deferred custody account.
240.3a4-5 Exemption from the definition of ``broker'' for banks
effecting transactions in securities in a custody account.
240.3a4-6 Exemption from the definition of ``broker'' for banks that
execute transactions in investment company securities through
NSCC Mutual Fund Services.
240.3a5-1 Exemption from the definition of ``dealer'' for a bank engaged
in riskless principal transactions.
Definition of ``Equity Security'' as Used in Sections 12(g) and 16
240.3a11-1 Definition of the term ``equity security''.
Miscellaneous Exemptions
240.3a12-1 Exemption of certain mortgages and interests in mortgages.
240.3a12-2 [Reserved]
240.3a12-3 Exemption from sections 14(a), 14(b), 14(c), 14(f), and 16
for securities of certain foreign issuers.
240.3a12-4 Exemptions from sections 15(a) and 15(c)(3) for certain
mortgage securities.
240.3a12-5 Exemption of certain investment contract securities from
sections 7(c) and 11(d)(1).
240.3a12-6 Definition of ``common trust fund'' as used in section
3(a)(12) of the Act.
240.3a12-7 Exemption for certain derivative securities traded otherwise
than on a national securities exchange.
240.3a12-8 Exemption for designated foreign government securities for
purposes of futures trading.
240.3a12-9 Exemption of certain direct participation program securities
from the arranging provisions of sections 7(c) and 11(d)(1).
240.3a12-10 Exemption of certain securities issued by the Resolution
Funding Corporation.
240.3a12-11 Exemption from sections 8(a), 14(a), 14(b), and 14(c) for
debt securities listed on a national securities exchange.
240.3a12-12 Exemption from certain provisions of section 16 of the Act
for asset-backed securities.
240.3a40-1 Designation of financial responsibility rules.
240.3a43-1 Customer-related government securities activities incidental
to the futures-related business of a futures commission
merchant registered with the Commodity Futures Trading
Commission.
240.3a44-1 Proprietary government securities transactions incidental to
the futures-related business of a CFTC-regulated person.
240.3a51-1 Definition of ``penny stock''.
240.3a55-1 Method for determining market capitalization and dollar value
of average daily trading volume; application of the definition
of narrow-based security index.
240.3a55-2 Indexes underlying futures contracts trading for fewer than
30 days.
240.3a55-3 Futures contracts on security indexes trading on or subject
to the rules of a foreign board of trade.
Definitions
240.3b-1 Definition of ``listed''.
[[Page 6]]
240.3b-2 Definition of ``officer''.
240.3b-3 [Reserved]
240.3b-4 Definition of ``foreign government,'' ``foreign issuer'' and
``foreign private issuer''.
240.3b-5 Non-exempt securities issued under governmental obligations.
240.3b-6 Liability for certain statements by issuers.
240.3b-7 Definition of ``executive officer''.
240.3b-8 Definitions of ``Qualified OTC Market Maker, Qualified Third
Market Maker'' and ``Qualified Block Positioner''.
240.3b-9 Definition of ``bank'' for purposes of section 3(a) (4) and (5)
of the Act.
240.3b-10 [Reserved]
240.3b-11 Definitions relating to limited partnership roll-up
transactions for purposes of sections 6(b)(9), 14(h) and
15A(b)(12)-(13).
240.3b-12 Definition of OTC derivatives dealer.
240.3b-13 Definition of eligible OTC derivative instrument.
240.3b-14 Definition of cash management securities activities.
240.3b-15 Definition of ancillary portfolio management securities
activities.
240.3b-16 Definitions of terms used in Section 3(a)(1) of the Act.
240.3b-17 Definitions of terms used in Section 3(a)(4) of the Act.
240.3b-18 Definitions of terms used in Section 3(a)(5) of the Act.
240.3b-19 Definition of ``issuer'' in section 3(a)(8) of the Act in
relation to asset-backed securities.
Registration and Exemption of Exchanges
240.6a-1 Application for registration as a national securities exchange
or exemption from registration based on limited volume.
240.6a-2 Amendments to application.
240.6a-3 Supplemental material to be filed by exchanges.
240.6a-4 Notice of registration under Section 6(g) of the Act, amendment
to such notice, and supplemental materials to be filed by
exchanges registered under Section 6(g) of the Act.
240.6h-1 Settlement and regulatory halt requirements for security
futures products.
240.7c2-1 [Reserved]
Hypothecation of Customers' Securities
240.8c-1 Hypothecation of customers' securities.
240.9b-1 Options disclosure document.
Short Sales
240.10a-1 Short sales.
240.10a-2 [Reserved]
Manipulative and Deceptive Devices and Contrivances
240.10b-1 Prohibition of use of manipulative or deceptive devices or
contrivances with respect to certain securities exempted from
registration.
240.10b-2 [Reserved]
240.10b-3 Employment of manipulative and deceptive devices by brokers or
dealers.
240.10b-4 [Reserved]
240.10b-5 Employment of manipulative and deceptive devices.
240.10b5-1 Trading ``on the basis of'' material nonpublic information in
insider trading cases.
240.10b5-2 Duties of trust or confidence in misappropriation insider
trading cases.
240.10b-6--240.10b-8 [Reserved]
240.10b-9 Prohibited representations in connection with certain
offerings.
240.10b-10 Confirmation of transactions.
240.10b-13 [Reserved]
240.10b-16 Disclosure of credit terms in margin transactions.
240.10b-17 Untimely announcements of record dates.
240.10b-18 Purchases of certain equity securities by the issuer and
others.
240.10b-21 [Reserved]
Reports Under Section 10A
240.10A-1 Notice to the Commission Pursuant to Section 10A of the Act.
240.10A-2 Auditor independence.
240.10A-3 Listing standards relating to audit committees.
Adoption of Floor Trading Regulation (Rule 11a-1)
240.11a-1 Regulation of floor trading.
240.11a1-1(T) Transactions yielding priority, parity, and precedence.
240.11a1-2 Transactions for certain accounts of associated persons of
members.
240.11a1-3(T) Bona fide hedge transactions in certain securities.
240.11a1-4(T) Bond transactions on national securities exchanges.
240.11a1-5 Transactions by registered competitive market makers and
registered equity market makers.
240.11a1-6 Transactions for certain accounts of OTC derivatives dealers.
240.11a2-2(T) Transactions effected by exchange members through other
members.
Adoption of Regulation on Conduct of Specialists
240.11b-1 Regulation of specialists.
Exemption of Certain Securities From Section 11(d)(1)
240.11d1-1 Exemption of certain securities from section 11(d)(1).
[[Page 7]]
240.11d1-2 Exemption from section 11(d)(1) for certain investment
company securities held by broker-dealers as collateral in
margin accounts.
240.11d2-1 Exemption from Section 11(d)(2) for certain broker-dealers
effecting transactions for customers security futures products
in futures accounts.
Securities Exempted From Registration
240.12a-4 Exemption of certain warrants from section 12(a).
240.12a-5 Temporary exemption of substituted or additional securities.
240.12a-6 Exemption of securities underlying certain options from
section 12(a).
240.12a-7 Exemption of stock contained in standardized market baskets
from section 12(a) of the Act.
240.12a-8 Exemption of depositary shares.
240.12a-9 Exemption of standardized options from section 12(a) of the
Act.
Regulation 12B: Registration and Reporting
General
240.12b-1 Scope of regulation.
240.12b-2 Definitions.
240.12b-3 Title of securities.
240.12b-4 Supplemental information.
240.12b-5 Determination of affiliates of banks.
240.12b-6 When securities are deemed to be registered.
240.12b-7 [Reserved]
Formal Requirements
240.12b-10 Requirements as to proper form.
240.12b-11 Number of copies; signatures; binding.
240.12b-12 Requirements as to paper, printing and language.
240.12b-13 Preparation of statement or report.
240.12b-14 Riders; inserts.
240.12b-15 Amendments.
General Requirements as to Contents
240.12b-20 Additional information.
240.12b-21 Information unknown or not available.
240.12b-22 Disclaimer of control.
240.12b-23 Incorporation by reference.
240.12b-24 [Reserved]
240.12b-25 Notification of inability to timely file all or any required
portion of a Form 10-K, 10-KSB, 20-F, 11-K, N-SAR, N-CSR, 10-
Q, 10-QSB or 10-D.
Exhibits
240.12b-30 Additional exhibits.
240.12b-31 Omission of substantially identical documents.
240.12b-32 Incorporation of exhibits by reference.
240.12b-33 Annual reports to other Federal agencies.
Special Provisions
240.12b-35 [Reserved]
240.12b-36 Use of financial statements filed under other acts.
240.12b-37 Satisfaction of filing requirements.
Certification by Exchanges and Effectiveness of Registration
240.12d1-1 Registration effective as to class or series.
240.12d1-2 Effectiveness of registration.
240.12d1-3 Requirements as to certification.
240.12d1-4 Date of receipt of certification by Commission.
240.12d1-5 Operation of certification on subsequent amendments.
240.12d1-6 Withdrawal of certification.
Suspension of Trading, Withdrawal, and Striking From Listing and
Registration
240.12d2-1 Suspension of trading.
240.12d2-2 Removal from listing and registration.
Unlisted Trading
240.12f-1 Applications for permission to reinstate unlisted trading
privileges.
240.12f-2 Extending unlisted trading privileges to a security that is
the subject of an initial public offering.
240.12f-3 Termination or suspension of unlisted trading privileges.
240.12f-4 Exemption of securities admitted to unlisted trading
privileges from sections 13, 14, and 16.
240.12f-5 Exchange rules for securities to which unlisted trading
privileges are extended.
240.12f-6 [Reserved]
Extensions and Temporary Exemptions; Definitions
240.12g-1 Exemption from section 12(g).
240.12g-2 Securities deemed to be registered pursuant to section
12(g)(1) upon termination of exemption pursuant to section
12(g)(2) (A) or (B).
240.12g-3 Registration of securities of successor issuers under section
12(b) or 12(g).
240.12g3-2 Exemptions for American depositary receipts and certain
foreign securities.
240.12g-4 Certifications of termination of registration under section
12(g).
240.12g5-1 Definition of securities ``held of record''.
240.12g5-2 Definition of ``total assets''.
240.12h-1 Exemptions from registration under section 12(g) of the Act.
240.12h-2 [Reserved]
240.12h-3 Suspension of duty to file reports under section 15(d).
[[Page 8]]
240.12h-4 Exemption from duty to file reports under section 15(d).
240.12h-5 Exemption for subsidiary issuers of guaranteed securities and
subsidiary guarantors.
Regulation 13A: Reports of Issuers of Securities Registered Pursuant to
Section 12
Annual Reports
240.13a-1 Requirements of annual reports.
240.13a-2 [Reserved]
240.13a-3 Reporting by Form 40-F registrant.
Other Reports
240.13a-10 Transition reports.
240.13a-11 Current reports on Form 8-K (Sec. 249.308 of this chapter).
240.13a-13 Quarterly reports on Form 10-Q and Form 10-QSB (Sec.
249.308a and Sec. 249.308b of this chapter).
240.13a-14 Certification of disclosure in annual and quarterly reports.
240.13a-15 Controls and procedures.
240.13a-16 Reports of foreign private issuers on Form 6-K (17 CFR
249.306).
240.13a-17 Reports of asset-backed issuers on Form 10-D (Sec. 249.312
of this chapter).
240.13a-18 Compliance with servicing criteria for asset-backed
securities.
240.13a-19 Reports by shell companies on Form 20-F.
Regulation 13b-2: Maintenance of Records and Preparation of Required
Reports
240.13b2-1 Falsification of accounting records.
240.13b2-2 Representations and conduct in connection with the
preparation of required reports and documents.
Regulation 13D
240.13d-1 Filing of Schedules 13D and 13G.
240.13d-2 Filing of amendments to Schedules 13D or 13G.
240.13d-3 Determination of beneficial owner.
240.13d-4 Disclaimer of beneficial ownership.
240.13d-5 Acquisition of securities.
240.13d-6 Exemption of certain acquisitions.
240.13d-7 Dissemination.
240.13d-101 Schedule 13D--Information to be included in statements filed
pursuant to Sec. 240.13d-1(a) and amendments thereto filed
pursuant to Sec. 240.13d-2(a).
240.13d-102 Schedule 13G--Information to be included in statements filed
pursuant to Sec. 240.13d-1(b), (c), and (d) and amendments
thereto filed pursuant to Sec. 240.13d-2(b).
240.13e-1 Purchase of securities by the issuer during a third-party
tender offer.
240.13e-2 [Reserved]
240.13e-3 Going private transactions by certain issuers or their
affiliates.
240.13e-4 Tender offers by issuers.
240.13e-100 Schedule 13E-3, Transaction statement under section 13(e) of
the Securities Exchange Act of 1934 and Rule 13e-3 (Sec.
240.13e-3) thereunder.
240.13e-101 [Reserved]
240.13e-102 Schedule 13E-4F. Tender offer statement pursuant to section
13(e) (1) of the Securities Exchange Act of 1934 and Sec.
240.13e-4 thereunder.
240.13f-1 Reporting by institutional investment managers of information
with respect to accounts over which they exercise investment
discretion.
240.13k-1 Foreign bank exemption from the insider lending prohibition
under section 13(k).
Regulation 14A: Solicitations of Proxies
240.14a-1 Definitions.
240.14a-2 Solicitations to which Sec. 240.14a-3 to Sec. 240.14a-15
apply.
240.14a-3 Information to be furnished to security holders.
240.14a-4 Requirements as to proxy.
240.14a-5 Presentation of information in proxy statement.
240.14a-6 Filing requirements.
240.14a-7 Obligations of registrants to provide a list of, or mail
soliciting material to, security holders.
240.14a-8 Shareholder proposals.
240.14a-9 False or misleading statements.
240.14a-10 Prohibition of certain solicitations.
240.14a-11 [Reserved]
240.14a-12 Solicitation before furnishing a proxy statement.
240.14a-13 Obligation of registrants in communicating with beneficial
owners.
240.14a-14 Modified or superseded documents.
240.14a-15 Differential and contingent compensation in connection with
roll-up transactions.
240.14a-101 Schedule 14A. Information required in proxy statement.
240.14a-102 [Reserved]
240.14a-103 Notice of Exempt Solicitation. Information to be included in
statements submitted by or on behalf of a person pursuant to
Sec. 240.14a-6(g).
240.14a-104 Notice of Exempt Preliminary Roll-up Communication.
Information regarding ownership interests and any potential
conflicts of interest to be included in statements submitted
by or on behalf of a person pursuant to Sec. 240.14a-2(b)(4)
and Sec. 240.14a-6(n).
240.14b-1 Obligation of registered brokers and dealers in connection
with the prompt forwarding of certain communications to
beneficial owners.
240.14b-2 Obligation of banks, associations and other entities that
exercise fiduciary
[[Page 9]]
powers in connection with the prompt forwarding of certain
communications to beneficial owners.
Regulation 14C: Distribution of Information Pursuant to Section 14(c)
240.14c-1 Definitions.
240.14c-2 Distribution of information statement.
240.14c-3 Annual report to be furnished security holders.
240.14c-4 Presentation of information in information statement.
240.14c-5 Filing requirements.
240.14c-6 False or misleading statements.
240.14c-7 Providing copies of material for certain beneficial owners.
240.14c-101 Schedule 14C. Information required in information statement.
Regulation 14D
240.14d-1 Scope of and definitions applicable to Regulations 14D and
14E.
240.14d-2 Commencement of a tender offer.
240.14d-3 Filing and transmission of tender offer statement.
240.14d-4 Dissemination of tender offers to security holders.
240.14d-5 Dissemination of certain tender offers by the use of
stockholder lists and security position listings.
240.14d-6 Disclosure of tender offer information to security holders.
240.14d-7 Additional withdrawal rights.
240.14d-8 Exemption from statutory pro rata requirements.
240.14d-9 Recommendation or solicitation by the subject company and
others.
240.14d-10 Equal treatment of security holders.
240.14d-11 Subsequent offering period.
240.14d-100 Schedule TO. Tender offer statement under section 14(d)(1)
or 13(e)(1) of the Securities Exchange Act of 1934.
240.14d-101 Schedule 14D-9.
240.14d-102 Schedule 14D-1F. Tender offer statement pursuant to rule
14d-1(b) under the Securities Exchange Act of 1934.
240.14d-103 Schedule 14D-9F. Solicitation/recommendation statement
pursuant to section 14(d)(4) of the Securities Exchange Act of
1934 and rules 14d-1(b) and 14e-2(c) thereunder.
Regulation 14E
240.14e-1 Unlawful tender offer practices.
240.14e-2 Position of subject company with respect to a tender offer.
240.14e-3 Transactions in securities on the basis of material, nonpublic
information in the context of tender offers.
240.14e-4 Prohibited transactions in connection with partial tender
offers.
240.14e-5 Prohibiting purchases outside of a tender offer.
240.14e-6 Repurchase offers by certain closed-end registered investment
companies.
240.14e-7 Unlawful tender offer practices in connection with roll-ups.
240.14e-8 Prohibited conduct in connection with pre-commencement
communications.
240.14f-1 Change in majority of directors.
Exemption of Certain OTC Derivatives Dealers
240.15a-1 Securities activities of OTC derivatives dealers.
Exemption of Certain Securities From Section 15(a)
240.15a-2 Exemption of certain securities of cooperative apartment
houses from section 15(a).
240.15a-3 [Reserved]
240.15a-4 Forty-five day exemption from registration for certain members
of national securities exchanges.
240.15a-5 Exemption of certain nonbank lenders.
Registration of Brokers and Dealers
240.15a-6 Exemption of certain foreign brokers or dealers.
240.15a-7 Exemption from the definitions of ``broker'' or ``dealer'' for
banks for limited period of time.
240.15a-8 Exemption for banks from Section 29 liability.
240.15a-9 Exemption from the definitions of ``broker'' and ``dealer''
for savings associations and savings banks.
240.15a-10 Exemption of certain brokers or dealers with respect to
security futures products.
240.15a-11 Exemption from the definitions of ``broker'' and ``dealer''
for banks engaging in securities lending transactions.
240.15b1-1 Application for registration of brokers or dealers.
240.15b1-2 [Reserved]
240.15b1-3 Registration of successor to registered broker or dealer.
240.15b1-4 Registration of fiduciaries.
240.15b1-5 Consent to service of process to be furnished by nonresident
brokers or dealers and by nonresident general partners or
managing agents of brokers or dealers.
240.15b2-2 Inspection of newly registered brokers and dealers.
240.15b3-1 Amendments to application.
240.15b5-1 Extension of registration for purposes of the Securities
Investor Protection Act of 1970 after cancellation or
revocation.
240.15b6-1 Withdrawal from registration.
240.15b7-1 Compliance with qualification requirements of self-regulatory
organizations.
[[Page 10]]
240.15b7-3T Operational capability in a Year 2000 environment.
240.15b9-1 Exemption for certain exchange members.
240.15b9-2 Exemption from SRO membership for OTC derivatives dealers.
240.15b11-1 Registration by notice of security futures product broker-
dealers.
Rules Relating to Over-the-Counter Markets
240.15c1-1 Definitions.
240.15c1-2 Fraud and misrepresentation.
240.15c1-3 Misrepresentation by brokers, dealers and municipal
securities dealers as to registration.
240.15c1-4 [Reserved]
240.15c1-5 Disclosure of control.
240.15c1-6 Disclosure of interest in distribution.
240.15c1-7 Discretionary accounts.
240.15c1-8 Sales at the market.
240.15c1-9 Use of pro forma balance sheets.
240.15c2-1 Hypothecation of customers' securities.
240.15c2-3 [Reserved]
240.15c2-4 Transmission or maintenance of payments received in
connection with underwritings.
240.15c2-5 Disclosure and other requirements when extending or arranging
credit in certain transactions.
240.15c2-6 [Reserved]
240.15c2-7 Identification of quotations.
240.15c2-8 Delivery of prospectus.
240.15c2-11 Initiation or resumption of quotations without specific
information.
240.15c2-12 Municipal securities disclosure.
240.15c3-1 Net capital requirements for brokers or dealers.
240.15c3-1a Options (Appendix A to 17 CFR 240.15c3-1).
240.15c3-1b Adjustments to net worth and aggregate indebtedness for
certain commodities transactions (Appendix B to 17 CFR
240.15c3-1).
240.15c3-1c Consolidated computations of net capital and aggregate
indebtedness for certain subsidiaries and affiliates (Appendix
C to 17 CFR 240.15c3-1).
240.15c3-1d Satisfactory Subordination Agreements (Appendix D to 17 CFR
240.15c3-1).
240.15c3-1e Deductions for market and credit risk for certain brokers or
dealers (Appendix E to 17 CFR 240.15c3-1).
240.15c3-1f Optional market and credit risk requirements for OTC
derivatives dealers (Appendix F to 17 CFR 240.15c3-1)
240.15c3-1g Conditions for ultimate holding companies of certain brokers
or dealers (Appendix G to 17 CFR 240.15c3-1).
240.15c3-2 Customers' free credit balances.
240.15c3-3 Customer protection--reserves and custody of securities.
240.15c3-3a Exhibit A--formula for determination reserve requirement of
brokers and dealers under Sec. 240.15c3-3.
240.15c3-4 Internal risk management control systems for OTC derivatives
dealers.
240.15c6-1 Settlement cycle.
Regulation 15D: Reports of Registrants Under the Securities Act of 1933
Annual Reports
240.15d-1 Requirement of annual reports.
240.15d-2 Special financial report.
240.15d-3 Reports for depositary shares registered on Form F-6.
240.15d-4 Reporting by Form 40-F Registrants.
240.15d-5 Reporting by successor issuers.
240.15d-6 Suspension of duty to file reports.
Other Reports
240.15d-10 Transition reports.
240.15d-11 Current reports on Form 8-K (Sec. 249.308 of this chapter).
240.15d-13 Quarterly reports on Form 10-Q and Form 10-QSB (Sec.
249.308a and Sec. 249.308b of this chapter).
240.15d-14 Certification of disclosure in annual and quarterly reports.
240.15d-15 Controls and procedures.
240.15d-16 Reports of foreign private issuers on Form 6-K [17 CFR
249.306].
240.15d-17 Reports of asset-backed issuers on Form 10-D (Sec. 249.312
of this chapter).
240.15d-18 Compliance with servicing criteria for asset-backed
securities.
240.15d-19 Reports by shell companies on Form 20-F.
Exemption of Certain Issuers From Section 15(d) of the Act
240.15d-21 Reports for employee stock purchase, savings and similar
plans.
240.15d-22 Reporting regarding asset-backed securities under section
15(d) of the Act.
240.15d-23 Reporting regarding certain securities underlying asset-
backed securities under section 15(d) of the Act.
240.15g-1 Exemptions for certain transactions.
240.15g-2 Penny stock disclosure document relating to the penny stock
market.
240.15g-3 Broker or dealer disclosure of quotations and other
information relating to the penny stock market.
240.15g-4 Disclosure of compensation to brokers or dealers.
240.15g-5 Disclosure of compensation of associated persons in connection
with penny stock transactions.
240.15g-6 Account statements for penny stock customers.
240.15g-8 Sales of escrowed securities of blank check companies.
240.15g-9 Sales practice requirements for certain low-priced securities.
[[Page 11]]
240.15g-100 Schedule 15G--Information to be included in the document
distributed pursuant to 17 CFR 240.15g-2.
National and Affiliated Securities Associations
240.15Aa-1 Registration of a national or an affiliated securities
association.
240.15Aj-1 Amendments and supplements to registration statements of
securities associations.
240.15Al2-1 [Reserved]
240.15Ba2-1 Application for registration of municipal securities dealers
which are banks or separately identifiable departments or
divisions of banks.
240.15Ba2-2 Application for registration of non-bank municipal
securities dealers whose business is exclusively intrastate.
240.15Ba2-4 Registration of successor to registered municipal securities
dealer.
240.15Ba2-5 Registration of fiduciaries.
240.15Ba2-6 [Reserved]
240.15Bc3-1 Withdrawal from registration of municipal securities
dealers.
240.15Bc7-1 Availability of examination reports.
Registration of Government Securities Brokers and Government Securities
Dealers
240.15Ca1-1 Notice of government securities broker-dealer activities.
240.15Ca2-1 Application for registration as a government securities
broker or government securities dealer.
240.15Ca2-2 [Reserved]
240.15Ca2-3 Registration of successor to registered government
securities broker or government securities dealer.
240.15Ca2-4 Registration of fiduciaries.
240.15Ca2-5 Consent to service of process to be furnished by non-
resident government securities brokers or government
securities dealers and by non-resident general partners or
managing agents of government securities brokers or government
securities dealers.
240.15Cc1-1 Withdrawal from registration of government securities
brokers or government securities dealers.
Reports of Directors, Officers, and Principal Shareholders
240.16a-1 Definition of terms.
240.16a-2 Persons and transactions subject to section 16.
240.16a-3 Reporting transactions and holdings.
240.16a-4 Derivative securities.
240.16a-5 Odd-lot dealers.
240.16a-6 Small acquisitions.
240.16a-7 Transactions effected in connection with a distribution.
240.16a-8 Trusts.
240.16a-9 Stock splits, stock dividends, and pro rata rights.
240.16a-10 Exemptions under section 16(a).
240.16a-11 Dividend or interest reinvestment plans.
240.16a-12 Domestic relations orders.
240.16a-13 Change in form of beneficial ownership.
Exemption of Certain Transactions From Section 16(b)
240.16b-1 Transactions approved by a regulatory authority.
240.16b-2 [Reserved]
240.16b-3 Transactions between an issuer and its officers or directors.
240.16b-4 [Reserved]
240.16b-5 Bona fide gifts and inheritance.
240.16b-6 Derivative securities.
240.16b-7 Mergers, reclassifications, and consolidations.
240.16b-8 Voting trusts.
Exemption of Certain Transactions From Section 16(c)
240.16c-1 Brokers.
240.16c-2 Transactions effected in connection with a distribution.
240.16c-3 Exemption of sales of securities to be acquired.
240.16c-4 Derivative securities.
Arbitrage Transactions
240.16e-1 Arbitrage transactions under section 16.
Preservation of Records and Reports of Certain Stabilizing Activities
240.17a-1 Recordkeeping rule for national securities exchanges, national
securities associations, registered clearing agencies and the
Municipal Securities Rulemaking Board.
240.17a-2 Recordkeeping requirements relating to stabilizing activities.
240.17a-3 Records to be made by certain exchange members, brokers and
dealers.
240.17a-4 Records to be preserved by certain exchange members, brokers
and dealers.
240.17a-5 Reports to be made by certain brokers and dealers.
240.17a-6 Right of national securities exchange, national securities
association, registered clearing agency or the Municipal
Securities Rulemaking Board to destroy or dispose of
documents.
240.17a-7 Records of non-resident brokers and dealers.
240.17a-8 Financial recordkeeping and reporting of currency and foreign
transactions.
240.17a-9T Records to be made and retained by certain exchange members,
brokers and dealers.
240.17a-10 Report of revenue and expenses.
[[Page 12]]
240.17a-11 Notification provisions for brokers and dealers.
240.17a-12 Reports to be made by certain OTC derivatives dealers.
240.17a-13 Quarterly security counts to be made by certain exchange
members, brokers, and dealers.
240.17a-18 [Reserved]
240.17a-19 Form X-17A-19 Report by national securities exchanges and
registered national securities associations of changes in the
membership status of any of their members.
240.17a-21 Reports of the Municipal Securities Rulemaking Board.
240.17a-22 Supplemental material of registered clearing agencies.
240.17a-23 Recordkeeping and reporting requirements relating to broker-
dealer trading systems.
240.17a-25 Electronic submission of securities transaction information
by exchange members, brokers, and dealers.
240.17d-1 Examination for compliance with applicable financial
responsibility rules.
240.17d-2 Program for allocation of regulatory responsibility.
240.17f-1 Requirements for reporting and inquiry with respect to
missing, lost, counterfeit or stolen securities.
240.17f-2 Fingerprinting of securities industry personnel.
240.17h-1T Risk assessment recordkeeping requirements for associated
persons of brokers and dealers.
240.17h-2T Risk assessment reporting requirements for brokers and
dealers.
Supervised Investment Bank Holding Company Rules
240.17i-1 Definitions.
240.17i-2 Notice of Intention to be Supervised by the Commission as an
SIBHC.
240.17i-3 Withdrawal of Supervision as an SIBHC.
240.17i-4 Internal Risk Management Control System Requirements for
SIBHCs.
240.17i-5 Record Creation, Maintenance, and Access Requirements for
SIBHCs.
240.17i-6 Reporting Requirements for SIBHCs.
240.17i-7 Calculations of Allowable Capital and Risk Allowances or
Alternative Capital Assessment.
240.17i-8 Notification Requirements for SIBHCs.
240.17Ab2-1 Registration of clearing agencies.
240.17Ac2-1 Application for registration of transfer agents.
240.17Ac2-2 Annual reporting requirement for registered transfer agents.
240.17Ac3-1 Withdrawal from registration with the Commission.
240.17Ad-1 Definitions.
240.17Ad-2 Turnaround, processing, and forwarding of items.
240.17Ad-3 Limitations on expansion.
240.17Ad-4 Applicability of Sec. Sec. 240.17Ad-2, 240.17Ad-3 and
240.17Ad-6(a) (1) through (7) and (11).
240.17Ad-5 Written inquiries and requests.
240.17Ad-6 Recordkeeping.
240.17Ad-7 Record retention.
240.17Ad-8 Securities position listings.
240.17Ad-9 Definitions.
240.17Ad-10 Prompt posting of certificate detail to master
securityholder files, maintenance of accurate securityholder
files, communications between co-transfer agents and
recordkeeping transfer agents, maintenance of current control
book, retention of certificate detail and ``buy-in'' of
physical over-issuance.
240.17Ad-11 Reports regarding aged record differences, buy-ins and
failure to post certificate detail to master securityholder
and subsidiary files.
240.17Ad-12 Safeguarding of funds and securities.
240.17Ad-13 Annual study and evaluation of internal accounting control.
240.17Ad-14 Tender agents.
240.17Ad-15 Signature guarantees.
240.17Ad-16 Notice of assumption or termination of transfer agent
services.
240.17Ad-17 Transfer agents' obligation to search for lost
securityholders.
240.17Ad-18 Year 2000 Reports to be made by certain transfer agents.
240.17Ad-19 Requirements for cancellation, processing, storage,
transportation, and destruction or other disposition of
securities certificates.
240.17Ad-20 Issuer restrictions or prohibitions on ownership by
securities intermediaries.
240.17Ad-21T Operational capability in a Year 2000 environment.
Suspension and Expulsion of Exchange Members
240.19a3-1 [Reserved]
240.19b-3 [Reserved]
240.19b-4 Filings with respect to proposed rule changes by self-
regulatory organizations.
240.19b-5 Temporary exemption from the filing requirements of Section
19(b) of the Act.
240.19b-7 Filings with respect to proposed rule changes submitted
pursuant to Section 19(b)(7) of the Act.
240.19c-1 Governing certain off-board agency transactions by members of
national securities exchanges.
240.19c-3 Governing off-board trading by members of national securities
exchanges.
240.19c-4 Governing certain listing or authorization determinations by
national securities exchanges and associations.
240.19c-5 Governing the multiple listing of options on national
securities exchanges.
[[Page 13]]
240.19d-1 Notices by self-regulatory organizations of final disciplinary
actions, denials, bars, or limitations respecting membership,
association, participation, or access to services, and summary
suspensions.
240.19d-2 Applications for stays of disciplinary sanctions or summary
suspensions by a self-regulatory organization.
240.19d-3 Applications for review of final disciplinary sanctions,
denials of membership, participation or association, or
prohibitions or limitations of access to services imposed by
self-regulatory organizations.
240.19d-4 Notice by the Public Company Accounting Oversight Board of
disapproval of registration or of disciplinary action.
240.19g2-1 Enforcement of compliance by national securities exchanges
and registered securities associations with the Act and rules
and regulations thereunder.
240.19h-1 Notice by a self-regulatory organization of proposed admission
to or continuance in membership or particiption or association
with a member of any person subject to a statutory
disqualification, and applications to the Commission for
relief therefrom.
Inspection and Publication of Information Filed Under the Act
240.24b-1 Documents to be kept public by exchanges.
240.24b-2 Nondisclosure of information filed with the Commission and
with any exchange.
240.24b-3 Information filed by issuers and others under sections 12, 13,
14, and 16.
240.24c-1 Access to nonpublic information.
240.31 Section 31 transaction fees.
240.31T Temporary rule regarding fiscal year 2004.
240.36a1-1 Exemption from Section 7 for OTC derivatives dealers.
240.36a1-2 Exemption from SIPA for OTC derivatives dealers.
Subpart B--Rules and Regulations Under the Securities Investor Protection
Act of 1970 [Reserved]
Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee,
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1,
78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll,
78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11,
and 7201 et seq.; and 18 U.S.C. 1350, unless otherwise noted.
Section 240.3a4-1 also issued under secs. 3 and 15, 89 Stat. 97, as
amended, 89 Stat. 121 as amended;
Section 240.3a12-8 also issued under 15 U.S.C. 78a et seq.,
particularly secs. 3(a)(12), 15 U.S.C. 78c(a)(12), and 23(a), 15 U.S.C.
78w(a);
Section 240.3a12-10 also issued under 15 U.S.C. 78b and c;
Section 240.3a12-9 also issued under secs. 3(a)(12), 7(c), 11(d)(1),
15 U.S.C. 78c(a)(12), 78g(c), 78k(d)(1));
Sections 240.3a43-1 and 240.3a44-1 also issued under sec. 3; 15
U.S.C. 78c;
Section 240.3b-6 is also issued under 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a).
Section 240.3b-9 also issued under secs. 2, 3 and 15, 89 Stat. 97,
as amended, 89 Stat. 121, as amended (15 U.S.C. 78b, 78c, 78o);
Section 240.9b-1 is also issued under sec. 2, 7, 10, 19(a), 48 Stat.
74, 78, 81, 85; secs. 201, 205, 209, 120, 48 Stat. 905, 906, 908; secs.
1-4, 8, 68 Stat. 683, 685; sec. 12(a), 73 Stat. 143; sec. 7(a), 74 Stat.
412; sec. 27(a), 84 Stat. 1433; sec. 308(a)(2), 90 Stat. 57; sec. 505,
94 Stat. 2292; secs. 9, 15, 23(a), 48 Stat. 889, 895, 901; sec. 230(a),
49 Stat. 704; secs. 3, 8, 49 Stat. 1377, 1379; sec. 2, 52 Stat. 1075;
secs. 6, 10, 78 Stat. 570-574, 580; sec. 11(d), 84 Stat. 121; sec. 18,
89 Stat. 155; sec. 204, 91 Stat. 1500; 15 U.S.C. 77b, 77g, 77j, 77s(a),
78i, 78o, 78w(a);
Section 240.10b-10 is also issued under secs. 2, 3, 9, 10, 11, 11A,
15, 17, 23, 48 Stat. 891, 89 Stat. 97, 121, 137, 156, (15 U.S.C. 78b,
78c, 78i, 78j, 78k, 78k-1, 78o, 78q).
Section 240.12a-7 also issued under 15 U.S.C. 78a et seq.,
particularly secs. 3(a)(12), 15 U.S.C. 78c(a)(12), 6, 15 U.S.C. 78(f),
11A, 15 U.S.C. 78k, 12, 15 U.S.C. 78(l), and 23(a)(1), 15 U.S.C.
78(w)(a)(1).
Sections 240.12b-1 to 240.12b-36 also issued under secs. 3, 12, 13,
15, 48 Stat. 892, as amended, 894, 895, as amended; 15 U.S.C. 78c, 78l,
78m, 78o;
Section 240.12b-15 is also issued under secs. 3(a) and 302, Pub.L.
No. 107-204, 116 Stat. 745.
Section 240.12b-25 is also issued under 15 U.S.C. 80a-8, 80a-24(a),
80a-29, and 80a-37.
Section 240.12g-3 is also issued under 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a).
Section 240.12g3-2 is also issued under 15 U.S.C. 77f, 77g, 77h,
77j, 77s(a).
Section 240.13a-10 is also issued under secs. 3(a) and 302, Pub.L.
No. 107-204, 116 Stat. 745.
Section 240.13a-11 is also issued under secs. 3(a) and 306(a), Pub.
L. 107-204, 116 Stat. 745.
Section 240.13a-14 is also issued under secs. 3(a) and 302, Pub. L.
No. 107-204, 116 Stat. 745.
Section 240.13a-15 is also issued under secs. 3(a) and 302, Pub. L.
No. 107-204, 116 Stat. 745.
Sections 240.13e-4, 240.14d-7, 240.14d-10 and 240.14e-1 also issued
under secs. 3(b), 9(a)(6), 10(b), 13(e), 14(d) and 14(e), 15 U.S.C.
78c(b), 78i(a)(6), 78j(b), 78m(e), 78n(d) and 78n(e) and sec. 23(c) of
the Investment Company Act of 1940, 15 U.S.C 80a-23(c);
Sections 240.13e-4 to 240.13e-101 also issued under secs. 3(b),
9(a)(6), 10(b), 13(e), 14(e), 15(c)(1), 48 Stat. 882, 889, 891, 894,
895, 901, sec. 8, 49 Stat. 1379, sec. 5, 78 Stat. 569, 570, secs. 2, 3,
82 Stat. 454, 455, secs. 1, 2, 3-5, 84 Stat. 1497, secs. 3, 18, 89 Stat.
97, 155; 15 U.S.C.
[[Page 14]]
78c(b), 78i(a)(6), 78j(b), 78m(e), 78n(e), 78o(c); sec. 23(c) of the
Investment Company Act of 1940; 54 Stat. 825; 15 U.S.C. 80a-23(c);
Section 240.13f-2(T) also issued under sec. 13(f)(1) (15 U.S.C.
78m(f)(1));
Sections 240.14a-1, 240.14a-3, 240.14a-13, 240.14b-1, 240.14b-2,
240.14c-1, and 240.14c-7 also issued under secs. 12, 15 U.S.C. 781, and
14, Pub. L. 99-222, 99 Stat. 1737, 15 U.S.C. 78n;
Sections 240.14a-3, 240.14a-13, 240.14b-1 and 240.14c-7 also issued
under secs. 12, 14 and 17, 15 U.S.C. 781, 78n and 78g;
Sections 240.14c-1 to 240.14c-101 also issued under sec. 14, 48
Stat. 895; 15 U.S.C. 78n;
Section 240.14d-1 is also issued under 15 U.S.C. 77g, 77j, 77s(a),
77ttt(a), 79t, 80a-37.
Section 240.14e-2 is also issued under 15 U.S.C. 77g, 77h, 77s(a),
77sss, 79t, 80a-37(a).
Section 240.14e-4 also issued under the Exchange Act, 15 U.S.C. 78a
et seq., and particularly sections 3(b), 10(a), 10(b), 14(e), 15(c), and
23(a) of the Exchange Act (15 U.S.C. 78c(b), 78j(a), 78j(b), 78n(e),
78o(c), and 78w(a)).
Section 240.15a-6, also issued under secs. 3, 10, 15, and 17, 15
U.S.C. 78c, 78j, 78o, and 78q;
Section 240.15b1-3 also issued under sec. 15, 17; 15 U.S.C. 78o 78q;
Sections 240.15b1-3 and 240.15b2-1 also issued under 15 U.S.C. 78o,
78q;
Section 240.15b2-2 also issued under secs. 3, 15; 15 U.S.C. 78c,
78o;
Sections 240.15b10-1 to 240.15b10-9 also issued under secs. 15, 17,
48 Stat. 895, 897, sec. 203, 49 Stat. 704, secs. 4, 8, 49 Stat. 1379,
sec. 5, 52 Stat. 1076, sec. 6, 78 Stat. 570; 15 U.S.C. 78o, 78q, 12
U.S.C. 241 nt.;
Section 240.15c2-6, also issued under secs. 3, 10, and 15, 15 U.S.C.
78c, 78j, and 78o.
Section 240.15c2-11 also issued under 15 U.S.C. 78j(b), 78o(c),
78q(a), and 78w(a).
Section 240.15c2-12 also issued under 15 U.S.C. 78b, 78c, 78j, 78o,
78o-4 and 78q.
Section 240.15c3-1 is also issued under secs. 15(c)(3), 15 U.S.C.
78o(c)(3).
Section 240.15c3-3 is also issued under 15 U.S.C. 78o(c)(2),
78(c)(3), 78q(a), 78w(a); sec. 6(c), 84 Stat. 1652; 15 U.S.C. 78fff.
Section 240.15c3-3(o) is also issued under Pub. L. 106-554, 114
Stat. 2763, section 203.
Section 240.15d-5 is also issued under 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a).
Section 240.15d-10 is also issued under 15 U.S.C. 80a-20(a) and 80a-
37(a), and secs. 3(a) and 302, Pub. L. No. 107-204, 116 Stat. 745.
Section 240.15d-11 is also issued under secs. 3(a) and 306(a), Pub.
L. 107-204, 116 Stat. 745.
Section 240.15d-14 is also issued under secs. 3(a) and 302, Pub. L.
No. 107-204, 116 Stat. 745.
Section 240.15d-15 is also issued under secs. 3(a) and 302, Pub. L.
No. 107-204, 116 Stat. 745.
Sections 240.15Ca1-1, 240.15Ca2-1, 240.15Ca2-2, 240.15Ca2-3,
240.15Ca2-4, 240.15Ca2-5, 240.15Cc1-1 also issued under secs. 3, 15C; 15
U.S.C. 78c, 78o-5;
Section 240.17a-3 also issued under secs. 2, 17, 23a, 48 Stat. 897,
as amended; 15 U.S.C. 78d-1, 78d-2, 78q; secs. 12, 14, 17, 23(a), 48
Stat. 892, 895, 897, 901; secs. 1, 4, 8, 49 Stat. 1375, 1379; sec.
203(a), 49 Stat. 704; sec. 5, 52 Stat. 1076; sec. 202, 68 Stat. 686;
secs. 3, 5, 10, 78 Stat. 565-568, 569, 570, 580; secs. 1, 3, 82 Stat.
454, 455; secs. 28(c), 3-5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat.
1503; secs. 8, 9, 14, 18, 89 Stat. 117, 118, 137, 155; 15 U.S.C. 78l,
78n, 78q, 78w(a);
Section 240.17a-4 also issued under secs. 2, 17, 23(a), 48 Stat.
897, as amended; 15 U.S.C. 78a, 78d-1, 78d-2; sec. 14, Pub. L. 94-29, 89
Stat. 137 (15 U.S.C. 78a); sec. 18, Pub. L. 94-29, 89 Stat. 155 (15
U.S.C. 78w);
Section 240.17a-23 also issued under 15 U.S.C. 78b, 78c, 78o, 78q,
and 78w(a).
Section 240.17f-1 is also authorized under sections 2, 17 and 17A,
48 Stat. 891, 89 Stat. 137, 141 (15 U.S.C. 78b, 78q, 78q-1);
Section 240.17h-1T also issued under 15 U.S.C. 78q.
Sections 240.17Ac2-1(c) and 240.17Ac2-2 also issued under secs. 17,
17A and 23(a); 48 Stat. 897, as amended, 89 Stat. 137, 141 and 48 Stat.
901 (15 U.S.C. 78q, 78q-1, 78w(a));
Section 240.17Ad-1 is also issued under secs. 2, 17, 17A and 23(a);
48 Stat. 841 as amended, 48 Stat. 897, as amended, 89 Stat. 137, 141,
and 48 Stat. 901 (15 U.S.C. 78b, 78q, 78q-1, 78w);
Sections 240.17Ad-5 and 240.17Ad-10 are also issued under secs. 3
and 17A; 48 Stat. 882, as amended, and 89 Stat. (15 U.S.C. 78c and 78q-
1);
Section 240.17Ad-7 also issued under 15 U.S.C. 78b, 78q, and 78q-1.
Sections 240.19c-4 also issued under secs. 6, 11A, 14, 15A, 19 and
23 of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3, and 78s);
Section 240.19c-5 also issued under Sections 6, 11A, and 19 of the
Securities Exchange Act of 1934, 48 Stat. 885, as amended, 89 Stat. 111,
as amended, and 48 Stat. 898, as amended, 15 U.S.C. 78f, 78k-1, and 78s.
Section 240.31-1 is also issued under sec. 31, 48 Stat. 904, as
amended (15 U.S.C. 78ee).
Editorial Note: Nomenclature changes to part 240 appear at 57 FR
36501, Aug. 13, 1992, and 57 FR 47409, Oct. 16, 1992.
Note: In Sec. Sec. 240.0-1 to 240.24b-3, the numbers to the right
of the decimal point correspond with the respective rule numbers of the
rules and regulations under the Securities Exchange Act of 1934.
ATTENTION ELECTRONIC FILERS
THIS REGULATION SHOULD BE READ IN CONJUNCTION WITH REGULATION S-T (PART
232 OF THIS CHAPTER), WHICH GOVERNS THE PREPARATION AND SUBMISSION OF
DOCUMENTS IN ELECTRONIC FORMAT. MANY PROVISIONS RELATING TO THE
PREPARATION AND SUBMISSION
[[Page 15]]
OF DOCUMENTS IN PAPER FORMAT CONTAINED IN THIS REGULATION ARE SUPERSEDED
BY THE PROVISIONS OF REGULATION S-T FOR DOCUMENTS REQUIRED TO BE FILED
IN ELECTRONIC FORMAT.
Subpart A_Rules and Regulations Under the Securities Exchange Act of
1934
Rules of General Application
Sec. 240.0-1 Definitions.
(a) As used in the rules and regulations in this part, prescribed by
the Commission pursuant to Title I of the Securities Exchange Act of
1934 (48 Stat. 881-905; 15 U.S.C. chapter 2B), unless the context
otherwise specifically requires:
(1) The term Commission means the Securities and Exchange
Commission.
(2) The term act means Title I of the Securities Exchange Act of
1934.
(3) The term section refers to a section of the Securities Exchange
Act of 1934. \1\
---------------------------------------------------------------------------
\1\ The provisions of paragraph (a)(3) of 17 CFR 240.0-1 relate to
the terminology of rules and regulations as published by the Securities
and Exchange Commission and are inapplicable to the terminology
appearing in the Code of Federal Regulations.
---------------------------------------------------------------------------
(4) The term rules and regulations refers to all rules and
regulations adopted by the Commission pursuant to the act, including the
forms for registration and reports and the accompanying instructions
thereto.
(5) The term electronic filer means a person or an entity that
submits filings electronically pursuant to Rules 100 and 101 of
Regulation S-T (Sec. Sec. 232.100 and 232.101 of this chapter,
respectively).
(6) The term electronic filing means a document under the federal
securities laws that is transmitted or delivered to the Commission in
electronic format.
(b) Unless otherwise specifically stated, the terms used in this
part shall have the meaning defined in the act.
(c) A rule or regulation which defines a term without express
reference to the act or to the rules and regulations, or to a portion
thereof, defines such term for all purposes as used both in the act and
in the rules and regulations, unless the context otherwise specifically
requires.
(d) Unless otherwise specified or the context otherwise requires,
the term prospectus means a prospectus meeting the requirements of
section 10(a) of the Securities Act of 1933 as amended.
Cross References: For definition of ``listed'', see Sec. 240.3b-1;
``officer'', Sec. 240.3b-2; ``short sale'', Sec. 240.3b-3. For
additional definitions, see Sec. 240.15c1-1.
[13 FR 8178, Dec. 22, 1948, as amended at 13 FR 9321, Dec. 31, 1948; 19
FR 6730, Oct. 20, 1954; 58 FR 14682, Mar. 18, 1993; 62 FR 36459, July 8,
1997]
Sec. 240.0-2 Business hours of the Commission.
(a) The principal office of the Commission, at 450 Fifth Street,
NW., Washington, DC 20549, is open each day, except Saturdays, Sundays,
and federal holidays, from 9 a.m. to 5:30 p.m., Eastern Standard Time or
Eastern Daylight Saving Time, whichever currently is in effect in
Washington, DC, provided that hours for the filing of documents pursuant
to the Act or the rules and regulations thereunder are as set forth in
paragraphs (b) and (c) of this section.
(b) Submissions made in paper. Paper documents filed with or
otherwise furnished to the Commission may be submitted to the Commission
each day, except Saturdays, Sundays and federal holidays, from 8 a.m. to
5:30 p.m., Eastern Standard Time or Eastern Daylight Saving Time,
whichever is currently in effect.
(c) Electronic filings. Filings made by direct transmission may be
submitted to the Commission each day, except Saturdays, Sundays and
federal holidays, from 8 a.m. to 10 p.m., Eastern Standard Time or
Eastern Daylight Saving Time, whichever is currently in effect.
Cross References: For registration and exemption of exchanges, see
Sec. Sec. 240.6a-1 to 240.6a-3. For forms for permanent registration of
securities, see Sec. 240.12b-1. For regulations relating to
registration of securities, see Sec. Sec. 240.12b-1 to 240.12b-36. For
forms for applications for registration of brokers and dealers, see
Sec. Sec. 240.15b1-1 to 240.15b9-1.
[58 FR 14682, Mar. 18, 1993, as amended at 65 FR 24801, Apr. 27, 2000;
68 FR 25799, May 13, 2003]
[[Page 16]]
Sec. 240.0-3 Filing of material with the Commission.
(a) All papers required to be filed with the Commission pursuant to
the Act or the rules and regulations thereunder shall be filed at the
principal office in Washington, DC. Material may be filed by delivery to
the Commission, through the mails or otherwise. The date on which papers
are actually received by the Commission shall be the date of filing
thereof if all of the requirements with respect to the filing have been
complied with, except that if the last day on which papers can be
accepted as timely filed falls on a Saturday, Sunday or holiday, such
papers may be filed on the first business day following.
(b) The manually signed original (or in the case of duplicate
originals, one duplicate original) of all registrations, applications,
statements, reports, or other documents filed under the Securities
Exchange Act of 1934, as amended, shall be numbered sequentially (in
addition to any internal numbering which otherwise may be present) by
handwritten, typed, printed, or other legible form of notation from the
facing page of the document through the last page of that document and
any exhibits or attachments thereto. Further, the total number of pages
contained in a numbered original shall be set forth on the first page of
the document.
(c) Each document filed shall contain an exhibit index, which should
immediately precede the exhibits filed with such document. The index
shall list each exhibit filed and identify by handwritten, typed,
printed, or other legible form of notation in the manually signed
original, the page number in the sequential numbering system described
in paragraph (b) of this section where such exhibit can be found or
where it is stated that the exhibit is incorporated by reference.
Further, the first page of the manually signed document shall list the
page in the filing where the exhibit index is located.
[44 FR 4666, Jan. 23, 1979, as amended at 45 FR 58828, Sept. 5, 1980]
Sec. 240.0-4 Nondisclosure of information obtained in examinations
and investigations.
Information or documents obtained by officers or employees of the
Commission in the course of any examination or investigation pursuant to
section 17(a) (48 Stat. 897, section 4, 49 Stat. 1379; 15 U.S.C. 78q(a))
or 21(a) (48 Stat. 899; 15 U.S.C. 78u(a)) shall, unless made a matter of
public record, be deemed confidential. Except as provided by 17 CFR
203.2, officers and employees are hereby prohibited from making such
confidential information or documents or any other non-public records of
the Commission available to anyone other than a member, officer or
employee of the Commission, unless the Commission or the General
Counsel, pursuant to delegated authority, authorizes the disclosure of
such information or the production of such documents as not being
contrary to the public interest. Any officer or employee who is served
with a subpoena requiring the disclosure of such information or the
production of such documents shall appear in court and, unless the
authorization described in the preceding sentence shall have been given,
shall respectfully decline to disclose the information or produce the
documents called for, basing his or her refusal upon this section. Any
officer or employee who is served with such a subpoena shall promptly
advise the General Counsel of the service of such subpoena, the nature
of the information or documents sought, and any circumstances which may
bear upon the desirability of making available such information or
documents.
(Sec. 19, 48 Stat. 85; sec. 20, 48 Stat. 86; sec. 21, 48 Stat. 899; sec.
23, 48 Stat. 901; sec. 18, 49 Stat. 831; sec. 20, 49 Stat. 833; sec.
319, 53 Stat. 1173; sec. 321, 53 Stat. 1174; sec. 38, 54 Stat. 841; sec.
42, 54 Stat. 842; sec. 209, 54 Stat. 853; sec. 211, 54 Stat. 855; sec.
1, 76 Stat. 394. (15 U.S.C. 77s, 77t, 78u, 78w, 79r, 79t, 77sss, 77uuu,
80a-37, 80a-41, 80b-9, 80b-11, 78d-1))
[44 FR 50836, Aug. 30, 1979, as amended at 53 FR 17459, May 17, 1988]
Sec. 240.0-5 Reference to rule by obsolete designation.
Wherever in any rule, form, or instruction book specific reference
is
[[Page 17]]
made to a rule by number or other designation which is now obsolete,
such reference shall be deemed to be made to the corresponding rule or
rules in the existing general rules and regulations.
[13 FR 8179, Dec. 22, 1948]
Sec. 240.0-6 Disclosure detrimental to the national defense or foreign
policy.
(a) Any requirement to the contrary notwithstanding, no registration
statement, report, proxy statement or other document filed with the
Commission or any securities exchange shall contain any document or
information which, pursuant to Executive order, has been classified by
an appropriate department or agency of the United States for protection
in the interests of national defense or foreign policy.
(b) Where a document or information is omitted pursuant to paragraph
(a) of this section, there shall be filed, in lieu of such document or
information, a statement from an appropriate department or agency of the
United States to the effect that such document or information has been
classified or that the status thereof is awaiting determination. Where a
document is omitted pursuant to paragraph (a) of this section, but
information relating to the subject matter of such document is
nevertheless included in material filed with the Commission pursuant to
a determination of an appropriate department or agency of the United
States that disclosure of such information would not be contrary to the
interests of national defense or foreign policy, a statement from such
department or agency to that effect shall be submitted for the
information of the Commission. A registrant may rely upon any such
statement in filing or omitting any document or information to which the
statement relates.
(c) The Commission may protect any information in its possession
which may require classification in the interests of national defense or
foreign policy pending determination by an appropriate department or
agency as to whether such information should be classified.
(d) It shall be the duty of the registrant to submit the documents
or information referred to in paragraph (a) of this section to the
appropriate department or agency of the United States prior to filing
them with the Commission and to obtain and submit to the Commission, at
the time of filing such documents or information, or in lieu thereof, as
the case may be, the statements from such department or agency required
by paragraph (b) of this section. All such statements shall be in
writing.
[33 FR 7682, May 24, 1968]
Sec. 240.0-8 Application of rules to registered broker-dealers.
Any provision of any rule or regulation under the Act which
prohibits any act, practice, or course of business by any person if the
mails or any means or instrumentality of interstate commerce are used in
connection therewith, shall also prohibit any such act, practice, or
course of business by any broker or dealer registered pursuant to
section 15(b) of the Act, or any person acting on behalf of such a
broker or dealer, irrespective of any use of the mails or any means or
instrumentality of interstate commerce.
[29 FR 12555, Sept. 3, 1964]
Sec. 240.0-9 Payment of fees.
All payment of fees shall be made in cash, certified check or by
United States postal money order, bank cashier's check or bank money
order payable to the Securities and Exchange Commission, omitting the
name or title of any official of the Commission. Payment of fees
required by this section shall be made in accordance with the directions
set forth in Sec. 202.3a of this chapter.
[61 FR 49959, Sept. 24, 1996]
Sec. 240.0-10 Small entities under the Securities Exchange Act for
purposes of the Regulatory Flexibility Act.
For purposes of Commission rulemaking in accordance with the
provisions of Chapter Six of the Administrative Procedure Act (5 U.S.C.
601 et seq.), and unless otherwise defined for purposes of a particular
rulemaking proceeding, the term small business or small organization
shall:
(a) When used with reference to an ``issuer'' or a ``person,'' other
than an
[[Page 18]]
investment company, mean an ``issuer'' or ``person'' that, on the last
day of its most recent fiscal year, had total assets of $5 million or
less;
(b) When used with reference to an ``issuer'' or ``person'' that is
an investment company, have the meaning ascribed to those terms by Sec.
270.0-10 of this chapter;
(c) When used with reference to a broker or dealer, mean a broker or
dealer that:
(1) Had total capital (net worth plus subordinated liabilities) of
less than $500,000 on the date in the prior fiscal year as of which its
audited financial statements were prepared pursuant to Sec. 240.17a-
5(d) or, if not required to file such statements, a broker or dealer
that had total capital (net worth plus subordinated liabilities) of less
than $500,000 on the last business day of the preceding fiscal year (or
in the time that it has been in business, if shorter); and
(2) Is not affiliated with any person (other than a natural person)
that is not a small business or small organization as defined in this
section;
(d) When used with reference to a clearing agency, mean a clearing
agency that:
(1) Compared, cleared and settled less than $500 million in
securities transactions during the preceding fiscal year (or in the time
that it has been in business, if shorter);
(2) Had less than $200 million of funds and securities in its
custody or control at all times during the preceding fiscal year (or in
the time that it has been in business, if shorter); and
(3) Is not affiliated with any person (other than a natural person)
that is not a small business or small organization as defined in this
section;
(e) When used with reference to an exchange, mean any exchange that:
(1) Has been exempted from the reporting requirements of Sec.
242.601 of this chapter; and
(2) Is not affiliated with any person (other than a natural person)
that is not a small business or small organization as defined in this
section;
(f) When used with reference to a municipal securities dealer that
is a bank (including any separately identifiable department or division
of a bank), mean any such municipal securities dealer that:
(1) Had, or is a department of a bank that had, total assets of less
than $10 million at all times during the preceding fiscal year (or in
the time that it has been in business, if shorter);
(2) Had an average monthly volume of municipal securities
transactions in the preceding fiscal year (or in the time it has been
registered, if shorter) of less than $100,000; and
(3) Is not affiliated with any person (other than a natural person)
that is not a small business or small organization as defined in this
section;
(g) When used with reference to a securities information processor,
mean a securities information processor that:
(1) Had gross revenues of less than $10 million during the preceding
fiscal year (or in the time it has been in business, if shorter);
(2) Provided service to fewer than 100 interrogation devices or
moving tickers at all times during the preceding fiscal year (or in the
time that it has been in business, if shorter); and
(3) Is not affiliated with any person (other than a natural person)
that is not a small business or small organization under this section;
and
(h) When used with reference to a transfer agent, mean a transfer
agent that:
(1) Received less than 500 items for transfer and less than 500
items for processing during the preceding six months (or in the time
that it has been in business, if shorter);
(2) Transferred items only of issuers that would be deemed ``small
businesses'' or ``small organizations'' as defined in this section; and
(3) Maintained master shareholder files that in the aggregate
contained less than 1,000 shareholder accounts or was the named transfer
agent for less than 1,000 shareholder accounts at all times during the
preceding fiscal year (or in the time that it has been in business, if
shorter); and
(4) Is not affiliated with any person (other than a natural person)
that is not a small business or small organization under this section.
(i) For purposes of paragraph (c) of this section, a broker or
dealer is affiliated with another person if:
[[Page 19]]
(1) Such broker or dealer controls, is controlled by, or is under
common control with such other person; a person shall be deemed to
control another person if that person has the right to vote 25 percent
or more of the voting securities of such other person or is entitled to
receive 25 percent or more of the net profits of such other person or is
otherwise able to direct or cause the direction of the management or
policies of such other person; or
(2) Such broker or dealer introduces transactions in securities,
other than registered investment company securities or interests or
participations in insurance company separate accounts, to such other
person, or introduces accounts of customers or other brokers or dealers,
other than accounts that hold only registered investment company
securities or interests or participations in insurance company separate
accounts, to such other person that carries such accounts on a fully
disclosed basis.
(j) For purposes of paragraphs (d) through (h) of this section, a
person is affiliated with another person if that person controls, is
controlled by, or is under common control with such other person; a
person shall be deemed to control another person if that person has the
right to vote 25 percent or more of the voting securities of such other
person or is entitled to receive 25 percent or more of the net profits
of such other person or is otherwise able to direct or cause the
direction of the management or policies of such other person.
(k) For purposes of paragraph (g) of this section, ``interrogation
device'' shall refer to any device that may be used to read or receive
securities information, including quotations, indications of interest,
last sale data and transaction reports, and shall include proprietary
terminals or personal computers that receive securities information via
computer-to-computer interfaces or gateway access.
[47 FR 5222, Feb. 4, 1982, as amended at 51 FR 25362, July 14, 1986; 63
FR 35514, June 30, 1998; 70 FR 37617, June 29, 2005]
Sec. 240.0-11 Filing fees for certain acquisitions, dispositions and
similar transactions.
(a) General. (1) At the time of filing a disclosure document
described in paragraphs (b) through (d) of this section relating to
certain acquisitions, dispositions, business combinations,
consolidations or similar transactions, the person filing the specified
document shall pay a fee payable to the Commission to be calculated as
set forth in paragraphs (b) through (d) of this section.
(2) Only one fee per transaction is required to be paid. A required
fee shall be reduced in an amount equal to any fee paid with respect to
such transaction pursuant to either section 6(b) of the Securities Act
of 1933 or any applicable provision of this rule; the fee requirements
under section 6(b) shall be reduced in an amount equal to the fee paid
the Commission with respect to a transaction under this regulation. No
part of a filing fee is refundable.
(3) If at any time after the initial payment the aggregate
consideration offered is increased, an additional filing fee based upon
such increase shall be paid with the required amended filing.
(4) When the fee is based upon the market value of securities, such
market value shall be established by either the average of the high and
low prices reported in the consolidated reporting system (for exchange
traded securities and last sale reported over-the-counter securities) or
the average of the bid and asked price (for other over-the-counter
securities) as of a specified date within 5 business days prior to the
date of the filing. If there is no market for the securities, the value
shall be based upon the book value of the securities computed as of the
latest practicable date prior to the date of the filing, unless the
issuer of the securities is in bankruptcy or receivership or has an
accumulated capital deficit, in which case one-third of the principal
amount, par value or stated value of the securities shall be used.
(5) The cover page of the filing shall set forth the calculation of
the fee in tabular format, as well as the amount offset by a previous
filing and the identification of such filing, if applicable.
[[Page 20]]
(b) Section 13(e)(1) filings. At the time of filing such statement
as the Commission may require pursuant to section 13(e)(1) of the
Exchange Act, a fee of one-fiftieth of one percent of the value of the
securities proposed to be acquired by the acquiring person. The value of
the securities proposed to be acquired shall be determined as follows:
(1) The value of the securities to be acquired solely for cash shall
be the amount of cash to be paid for them:
(2) The value of the securities to be acquired with securities or
other non-cash consideration, whether or not in combination with a cash
payment for the same securities, shall be based upon the market value of
the securities to be received by the acquiring person as established in
accordance with paragraph (a)(4) of this section.
(c) Proxy and information statement filings. At the time of filing a
preliminary proxy statement pursuant to Rule 14a-6(a) or preliminary
information statement pursuant to Rule 14c-5(a) that concerns a merger,
consolidation, acquisition of a company, or proposed sale or other
disposition of substantially all the assets of the registrant (including
a liquidation), the following fee:
(1) For preliminary material involving a vote upon a merger,
consolidation or acquisition of a company, a fee of one-fiftieth of one
percent of the proposed cash payment or of the value of the securities
and other property to be transferred to security holders in the
transaction. The fee is payable whether the registrant is acquiring
another company or being acquired.
(i) The value of securities or other property to be transferred to
security holders, whether or not in combination with a cash payment for
the same securities, shall be based upon the market value of the
securities to be received by the acquiring person as established in
accordance with paragraph (a)(4) of this section.
(ii) Notwithstanding the above, where the acquisition, merger or
consolidation is for the sole purpose of changing the registrant's
domicile, no filing fee is required to be paid.
(2) For preliminary material involving a vote upon a proposed sale
or other disposition of substantially all the assets of the registrant,
a fee of one-fiftieth of one percent of the aggregate of the cash and
the value of the securities (other than its own) and other property to
be received by the registrant. In the case of a disposition in which the
registrant will not receive any property, such as at liquidation or
spin-off, the fee shall be one-fiftieth of one percent of the aggregate
of the cash and the value of the securities and other property to be
distributed to security holders.
(i) The value of the securities to be received (or distributed in
the case of a spin-off or liquidation) shall be based upon the market
value of such securities as established in accordance with paragraph
(a)(4) of this section.
(ii) The value of other property shall be a bona fide estimate of
the fair market value of such property.
(3) Where two or more companies are involved in the transaction,
each shall pay a proportionate share of such fee, determined by the
persons involved.
(4) Notwithstanding the above, the fee required by this paragraph
(c) shall not be payable for a proxy statement filed by a company
registered under the Investment Company Act of 1940.
(d) Schedule 14D-1 filings. At the time of filing a Schedule 14D-1,
a fee of one-fiftieth of one percent of the aggregate of the cash or of
the value of the securities or other property offered by the bidder.
Where the bidder is offering securities or other non-cash consideration
for some or all of the securities to be acquired, whether or not in
combination with a cash payment for the same securities, the value of
the consideration to be offered for such securities shall be based upon
the market value of the securities to be received by the bidder as
established in accordance with paragraph (a)(4) of this section.
[51 FR 2476, Jan. 17, 1986, as amended at 58 FR 14682, Mar. 18, 1993; 61
FR 49959, Sept. 24, 1996]
[[Page 21]]
Sec. 240.0-12 Commission procedures for filing applications for orders
for exemptive relief under Section 36 of the Exchange Act.
(a) The application shall be in writing in the form of a letter,
must include any supporting documents necessary to make the application
complete, and otherwise must comply with Sec. 240.0-3. All applications
must be submitted to the Office of the Secretary of the Commission.
Requestors may seek confidential treatment of their applications to the
extent provided under Sec. 200.81 of this chapter. If an application is
incomplete, the Commission, through the Division handling the
application, may request that the application be withdrawn unless the
applicant can justify, based on all the facts and circumstances, why
supporting materials have not been submitted and undertakes to submit
the omitted materials promptly.
(b) An applicant may submit a request electronically in standard
electronic mail text or ASCII format. The electronic mailbox to use for
these applications is described on the Commission's website at
www.sec.gov in the ``Exchange Act Exemptive Applications'' subsection
located under the ``Current SEC Rulemaking'' section. In the event
electronic mailboxes are revised in the future, applicants can find the
appropriate mailbox by accessing the Commission's website directory of
electronic mailboxes at http://www.sec.gov/asec/mailboxs.htm.
(c) An applicant also may submit a request in paper format. Five
copies of every paper application and every amendment to such an
application must be submitted to the Office of the Secretary at 450
Fifth Street, N.W., Washington, D.C. 20549. Applications must be on
white paper no larger than 8\1/2\ by 11 inches in size. The left margin
of applications must be at least 1\1/2\ inches wide, and if the
application is bound, it must be bound on the left side. All typewritten
or printed material must be on one side of the paper only and must be
set forth in black ink so as to permit photocopying.
(d) Every application (electronic or paper) must contain the name,
address and telephone number of each applicant and the name, address,
and telephone number of a person to whom any questions regarding the
application should be directed. The Commission will not consider
hypothetical or anonymous requests for exemptive relief. Each applicant
shall state the basis for the relief sought, and identify the
anticipated benefits for investors and any conditions or limitations the
applicant believes would be appropriate for the protection of investors.
Applicants should also Cite to and discuss applicable precedent.
(e) Amendments to the application should be prepared and submitted
as set forth in these procedures and should be marked to show what
changes have been made.
(f) After the filing is complete, the applicable Division will
review the application. Once all questions and issues have been answered
to the satisfaction of the Division, the staff will make an appropriate
recommendation to the Commission. After consideration of the
recommendation by the Commission, the Commission's Office of the
Secretary will issue an appropriate response and will notify the
applicant. If the application pertains to a section of the Exchange Act
pursuant to which the Commission has delegated its authority to the
appropriate Division, the Division Director or his or her designee will
issue an appropriate response and notify the applicant.
(g) The Commission, in its sole discretion, may choose to publish in
the Federal Register a notice that the application has been submitted.
The notice would provide that any person may, within the period
specified therein, submit to the Commission any information that relates
to the Commission action requested in the application. The notice also
would indicate the earliest date on which the Commission would take
final action on the application, but in no event would such action be
taken earlier than 25 days following publication of the notice in the
Federal Register.
(h) The Commission may, in its sole discretion, schedule a hearing
on the matter addressed by the application.
[63 FR 8102, Feb. 18. 1998]
[[Page 22]]
Sec. 240.3a1-1 Exemption from the definition of ``Exchange'' under
Section 3(a)(1) of the Act.
(a) An organization, association, or group of persons shall be
exempt from the definition of the term ``exchange'' under section
3(a)(1) of the Act, (15 U.S.C. 78c(a)(1)), if such organization,
association, or group of persons:
(1) Is operated by a national securities association;
(2) Is in compliance with Regulation ATS, 17 CFR 242.300 through
242.303; or
(3) Pursuant to paragraph (a) of Sec. 242.301 of Regulation ATS, 17
CFR 242.301(a), is not required to comply with Regulation ATS, 17 CFR
242.300 through 242.303.
(b) Notwithstanding paragraph (a) of this section, an organization,
association, or group of persons shall not be exempt under this section
from the definition of ``exchange,'' if:
(1) During three of the preceding four calendar quarters such
organization, association, or group of persons had:
(i) Fifty percent or more of the average daily dollar trading volume
in any security and five percent or more of the average daily dollar
trading volume in any class of securities; or
(ii) Forty percent or more of the average daily dollar trading
volume in any class of securities; and
(2) The Commission determines, after notice to the organization,
association, or group of persons, and an opportunity for such
organization, association, or group of persons to respond, that such an
exemption would not be necessary or appropriate in the public interest
or consistent with the protection of investors taking into account the
requirements for exchange registration under section 6 of the Act, (15
U.S.C. 78f), and the objectives of the national market system under
section 11A of the Act, (15 U.S.C 78k-1).
(3) For purposes of paragraph (b) of this section, each of the
following shall be considered a ``class of securities'':
(i) Equity securities, which shall have the same meaning as in Sec.
240.3a11-1;
(ii) Listed options, which shall mean any options traded on a
national securities exchange or automated facility of a national
securities exchange;
(iii) Unlisted options, which shall mean any options other than
those traded on a national securities exchange or automated facility of
a national securities association;
(iv) Municipal securities, which shall have the same meaning as in
section 3(a)(29) of the Act, (15 U.S.C. 78c(a)(29));
(v) Investment grade corporate debt securities, which shall mean any
security that:
(A) Evidences a liability of the issuer of such security;
(B) Has a fixed maturity date that is at least one year following
the date of issuance;
(C) Is rated in one of the four highest ratings categories by at
least one Nationally Recognized Statistical Ratings Organization; and
(D) Is not an exempted security, as defined in section 3(a)(12) of
the Act, (15 U.S.C. 78c(a)(12));
(vi) Non-investment grade corporate debt securities, which shall
mean any security that:
(A) Evidences a liability of the issuer of such security;
(B) Has a fixed maturity date that is at least one year following
the date of issuance;
(C) Is not rated in one of the four highest ratings categories by at
least one Nationally Recognized Statistical Ratings Organization; and
(D) Is not an exempted security, as defined in section 3(a)(12) of
the Act, (15 U.S.C. 78o);
(vii) Foreign corporate debt securities, which shall mean any
security that:
(A) Evidences a liability of the issuer of such debt security;
(B) Is issued by a corporation or other organization incorporated or
organized under the laws of any foreign country; and
(C) Has a fixed maturity date that is at least one year following
the date of issuance; and
(viii) Foreign sovereign debt securities, which shall mean any
security that:
(A) Evidences a liability of the issuer of such debt security;
(B) Is issued or guaranteed by the government of a foreign country,
any political subdivision of a foreign country, or any supranational
entity; and
[[Page 23]]
(C) Does not have a maturity date of a year or less following the
date of issuance.
[63 FR 70917, Dec. 22, 1998]
Sec. 240.3a4-1 Associated persons of an issuer deemed not to be brokers.
(a) An associated person of an issuer of securities shall not be
deemed to be a broker solely by reason of his participation in the sale
of the securities of such issuer if the associated person:
(1) Is not subject to a statutory disqualification, as that term is
defined in section 3(a)(39) of the Act, at the time of his
participation; and
(2) Is not compensated in connection with his participation by the
payment of commissions or other remuneration based either directly or
indirectly on transactions in securities; and
(3) Is not at the time of his participation an associated person of
a broker or dealer; and
(4) Meets the conditions of any one of paragraph (a)(4) (i), (ii),
or (iii) of this section.
(i) The associated person restricts his participation to
transactions involving offers and sales of securities:
(A) To a registered broker or dealer; a registered investment
company (or registered separate account); an insurance company; a bank;
a savings and loan association; a trust company or similar institution
supervised by a state or federal banking authority; or a trust for which
a bank, a savings and loan association, a trust company, or a registered
investment adviser either is the trustee or is authorized in writing to
make investment decisions; or
(B) That are exempted by reason of section 3(a)(7), 3(a)(9) or
3(a)(10) of the Securities Act of 1933 from the registration provisions
of that Act; or
(C) That are made pursuant to a plan or agreement submitted for the
vote or consent of the security holders who will receive securities of
the issuer in connection with a reclassification of securities of the
issuer, a merger or consolidation or a similar plan of acquisition
involving an exchange of securities, or a transfer of assets of any
other person to the issuer in exchange for securities of the issuer; or
(D) That are made pursuant to a bonus, profit-sharing, pension,
retirement, thrift, savings, incentive, stock purchase, stock ownership,
stock appreciation, stock option, dividend reinvestment or similar plan
for employees of an issuer or a subsidiary of the issuer;
(ii) The associated person meets all of the following conditions:
(A) The associated person primarily performs, or is intended
primarily to perform at the end of the offering, substantial duties for
or on behalf of the issuer otherwise than in connection with
transactions in securities; and
(B) The associated person was not a broker or dealer, or an
associated person of a broker or dealer, within the preceding 12 months;
and
(C) The associated person does not participate in selling an
offering of securities for any issuer more than once every 12 months
other than in reliance on paragraph (a)(4)(i) or (iii) of this section,
except that for securities issued pursuant to rule 415 under the
Securities Act of 1933, the 12 months shall begin with the last sale of
any security included within one rule 415 registration.
(iii) The associated person restricts his participation to any one
or more of the following activities:
(A) Preparing any written communication or delivering such
communication through the mails or other means that does not involve
oral solicitation by the associated person of a potential purchaser;
Provided, however, that the content of such communication is approved by
a partner, officer or director of the issuer;
(B) Responding to inquiries of a potential purchaser in a
communication initiated by the potential purchaser; Provided, however,
That the content of such responses are limited to information contained
in a registration statement filed under the Securities Act of 1933 or
other offering document; or
(C) Performing ministerial and clerical work involved in effecting
any transaction.
(b) No presumption shall arise that an associated person of an
issuer has violated section 15(a) of the Act solely by reason of his
participation in the sale of securities of the issuer if he does not
meet the conditions specified in paragraph (a) of this section.
[[Page 24]]
(c) Definitions. When used in this section:
(1) The term associated person of an issuer means any natural person
who is a partner, officer, director, or employee of:
(i) The issuer;
(ii) A corporate general partner of a limited partnership that is
the issuer;
(iii) A company or partnership that controls, is controlled by, or
is under common control with, the issuer; or
(iv) An investment adviser registered under the Investment Advisers
Act of 1940 to an investment company registered under the Investment
Company Act of 1940 which is the issuer.
(2) The term associated person of a broker or dealer means any
partner, officer, director, or branch manager of such broker or dealer
(or any person occupying a similar status or performing similar
functions), any person directly or indirectly controlling, controlled
by, or under common control with such broker or dealer, or any employee
of such broker or dealer, except that any person associated with a
broker or dealer whose functions are solely clerical or ministerial and
any person who is required under the laws of any State to register as a
broker or dealer in that State solely because such person is an issuer
of securities or associated person of an issuer of securities shall not
be included in the meaning of such term for purposes of this section.
[50 FR 27946, July 9, 1985]
Sec. 240.3a4-2 Exemption from the definition of ``broker'' for bank
calculating compensation for effecting transactions in fiduciary accounts.
(a) A bank that meets the conditions for exception from the
definition of the term ``broker'' under Section 3(a)(4)(B)(ii) of the
Act (15 U.S.C. 78c(a)(4)(B)(ii)), except for the ``chiefly compensated''
condition in Section 3(a)(4)(B)(ii)(I) of the Act (15 U.S.C.
78c(a)(4)(B)(ii)(I)), is exempt from the definition of the term
``broker'' under Section 3(a)(4) of the Act (15 U.S.C. 78c(a)(4)) solely
for effecting transactions in securities pursuant to Section
3(a)(4)(B)(ii) of the Act (15 U.S.C. 78c(a)(4)(B)(ii)) if:
(1) The bank can demonstrate that sales compensation, as defined in
Sec. 240.3b-17(j), received during the immediately preceding year is
less than 10% of the total amount of relationship compensation, as
defined in Sec. 240.3b-17(i), received during that year;
(2) The bank maintains procedures reasonably designed to ensure
compliance with the ``chiefly compensated'' condition in Section
3(a)(4)(B)(ii)(I) of the Act (15 U.S.C. 78c(a)(4)(B)(ii)(I)) with
respect to a trust or fiduciary account:
(i) When the account is opened;
(ii) When the compensation arrangement for the account is changed;
and
(iii) When sales compensation, as defined in Sec. 240.3b-17,
received from the account is reviewed by the bank for purposes of
determining an employee's compensation; and
(3) The bank complies with Section 3(a)(4)(C) of the Act (15 U.S.C.
78c(a)(4)(C)).
(b) For purposes of this section, the term year means either a
calendar year or other fiscal year consistently used by the bank for
recordkeeping and reporting purposes.
[66 FR 27796, May 18, 2001]
Sec. 240.3a4-3 Exemption from the definition of ``broker'' for bank
effecting transactions as an indenture trustee in a no-load money market
fund.
A bank that meets the conditions for exception from the definition
of the term ``broker'' under Section 3(a)(4)(B)(ii) of the Act (15
U.S.C. 78c(a)(4)(B)(ii)), except for the ``chiefly compensated''
condition in Section 3(a)(4)(B)(ii)(I) of the Act (15 U.S.C.
78c(a)(4)(B)(ii)(I)), is exempt from the definition of the term
``broker'' under Section 3(a)(4) of the Act (15 U.S.C. 78c(a)(4)) solely
for effecting transactions as an indenture trustee in a no-load money
market fund, as defined in Sec. 240.3b-17(f) and Sec. 240.3b-17(e),
respectively.
[66 FR 27796, May 18, 2001]
[[Page 25]]
Sec. 240.3a4-4 Exemption from the definition of ``broker'' for small
bank effecting transactions in investment company securities in a
tax-deferred custody account.
(a) A small bank is exempt from the definition of the term
``broker'' under Section 3(a)(4) of the Act (15 U.S.C. 78c(a)(4)) solely
for effecting transactions in securities of an open-end management
investment company registered under the Investment Company Act of 1940
(15 U.S.C. 80a-1 et seq.) in a tax-deferred account for which the bank
acts as custodian under Section 3(a)(4)(B)(viii) of the Act (15 U.S.C.
78c(a)(4)(B)(viii)) if:
(1) The bank is not associated with a broker or dealer and does not
have an arrangement with a broker or dealer to effect transactions in
securities for the bank's customers;
(2) Any bank employee effecting such transactions:
(i) Is not an associated person of a broker or dealer;
(ii) Primarily performs duties for the bank other than effecting
transactions in securities for customers; and
(iii) Does not receive compensation for such transactions from the
bank, the executing broker or dealer, or any other person related to:
(A) The size, value, or completion of any securities transaction;
(B) The amount of securities-related assets gathered; or
(C) The size or value of any customer's securities account;
(3) The bank complies with Section 3(a)(4)(C) of the Act (15 U.S.C.
78c(a)(4)(C));
(4) The bank makes available to the tax-deferred account the
securities of investment companies that are not affiliated persons, as
defined in Section 2(a)(3) of the Investment Company Act of 1940 (15
U.S.C. 80a-2(a)(3)), of the bank and that have similar characteristics
to the securities of investment companies made available that are
affiliated persons;
(5) The bank does not solicit securities transactions except through
the following activities:
(i) Delivering advertising and sales literature for the security
that is prepared by the registered broker-dealer that is the principal
underwriter of an open-end management investment company registered
under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), or
prepared by an open-end management investment company registered under
the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) that is not
an affiliated person, as defined in Section 2(a)(3) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)(3)), of the bank;
(ii) Responding to inquiries of a potential purchaser in a
communication initiated by the potential purchaser; provided, however,
that the content of such responses is limited to information contained
in a registration statement for the security of an investment company
filed under the Securities Act of 1933 (15 U.S.C. 77a et seq.) or sales
literature prepared by the investment company security's principal
underwriter that is a registered broker-dealer;
(iii) Advertising of trust activities, if any, permitted under
Section 3(a)(4)(B)(ii)(II) of the Act (15 U.S.C. 78c(a)(4)(B)(ii)(II));
or
(iv) Notifying its existing customers that it accepts orders for
investment company securities in conjunction with solicitations related
to its other activities concerning tax-deferred accounts; and
(6) The bank's annual compensation related to effecting transactions
in securities pursuant to this exemption is less than 3% of its annual
revenue.
(b) Definitions. For purposes of this section:
(1) The phrase compensation related to effecting transactions in
securities pursuant to this exemption means the total annual
compensation received for effecting transactions in securities pursuant
to this exemption, including fees received from investment companies for
distribution.
(2) The term networking arrangement means a contractual or other
written arrangement with a broker or dealer to effect transactions in
securities for the bank's customers.
(3) The term principal underwriter has the meaning given in Section
2(a)(29) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(29)).
[[Page 26]]
(4) The term revenue means the total annual net interest income and
noninterest income from the bank's most recent Consolidated Reports of
Condition and Income (Call Reports) or any successor forms the bank is
required to file by its appropriate Federal banking agency (as defined
in Section 3 of the FDIA (12 U.S.C. 1813).
(5) (i) The term small bank means a bank that:
(A) Had less than $100 million in assets as of December 31 of both
of the prior two calendar years; and
(B) Is not, and since December 31 of the third prior calendar year
has not been, an affiliate of a bank holding company or a financial
holding company that as of December 31 of both of the prior two calendar
years had consolidated assets of more than $1 billion.
(ii) For purposes of this paragraph (b)(5) the terms affiliate, bank
holding company, and financial holding company have the same meanings as
given in the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.).
(6) The term tax-deferred account means those accounts described in
Sections 401(a), 403, 408, and 408A under Subchapter D and in Section
457 under Subchapter E of the Internal Revenue Code of 1986 (26 U.S.C. 1
et seq.).
[66 FR 27796, May 18, 2001]
Sec. 240.3a4-5 Exemption from the definition of ``broker'' for banks
effecting transactions in securities in a custody account.
(a) A bank is exempt from the definition of the term ``broker''
under Section 3(a)(4) of the Act (15 U.S.C. 78c(a)(4)) solely for
effecting transactions in securities in an account for which the bank
acts as custodian under Section 3(a)(4)(B)(viii) of the Act (15 U.S.C.
78c(a)(4)(B)(viii)) if:
(1) The bank does not directly or indirectly receive any
compensation for effecting such transactions;
(2) Any bank employee effecting such transactions:
(i) Is not an associated person of a broker or dealer;
(ii) Primarily performs duties for the bank other than effecting
transactions in securities for customers;
(iii) Does not receive compensation for such transactions related
to:
(A) The size, value, or completion of any securities transaction;
(B) The amount of securities-related assets gathered; or
(C) The size or value of any customer's securities account; and
(iv) Does not receive compensation for the referral of any customer
to the broker or dealer;
(3) The bank complies with Section 3(a)(4)(C) of the Act (15 U.S.C.
78c(a)(4)(C));
(4) The bank makes available to the account the securities of
investment companies with similar characteristics that are not
affiliated persons, as defined in Section 2(a)(3) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)(3)), of the bank, if the bank
makes available the securities of investment companies that are
affiliated persons, as defined in Section 2(a)(3) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)(3)); and
(5) The bank does not solicit securities transactions except through
the following activities:
(i) Delivering advertising and sales literature for the security
that is prepared by the registered broker-dealer that is the principal
underwriter of an investment company, or prepared by an investment
company that is not an affiliated person, as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)), of the
bank;
(ii) Responding to inquiries of a potential purchaser in a
communication initiated by the potential purchaser of the security;
provided, however, that the content of such responses is limited to
information contained in a registration statement for the security filed
under the Securities Act of 1933 (15 U.S.C. 77a et seq.) or sales
literature prepared by the principal underwriter that is a registered
broker-dealer;
(iii) Advertising of trust activities, if any, permitted under
Section 3(a)(4)(B)(ii)(II) of the Act (15 U.S.C. 78c(a)(4)(B)(ii)(II));
and
(iv) Notifying its existing customers that it accepts orders for
securities in conjunction with solicitations related to its other
custody activities.
(b) For purposes of this section, the term principal underwriter has
the meaning given in Section 2(a)(29) of the
[[Page 27]]
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(29)).
[66 FR 27796, May 18, 2001]
Sec. 240.3a4-6 Exemption from the definition of ``broker'' for banks
that execute transactions in investment company securities through
NSCC Mutual Fund Services.
A bank that meets the conditions for an exception or exemption from
the definition of the term ``broker,'' except for the condition in
Section 3(a)(4)(C)(i) of the Act (15 U.S.C. 78c(a)(4)(C)(i)), is exempt
from such condition solely for transactions in investment company
securities effected through the National Securities Clearing
Corporation's Mutual Fund Services.
[66 FR 27796, May 18, 2001]
Sec. 240.3a5-1 Exemption from the definition of ``dealer'' for a bank
engaged in riskless principal transactions.
(a) A bank is exempt from the definition of the term ``dealer'' to
the extent that it engages in or effects riskless principal transactions
if the number of such riskless principal transactions during a calendar
year combined with transactions in which the bank is acting as an agent
for a customer pursuant to section 3(a)(4)(B)(xi) of the Act (15 U.S.C.
78c(a)(4)(B)(xi)) during that same year does not exceed 500.
(b) For purposes of this section, the term riskless principal
transaction means a transaction in which, after having received an order
to buy from a customer, the bank purchased the security from another
person to offset a contemporaneous sale to such customer or, after
having received an order to sell from a customer, the bank sold the
security to another person to offset a contemporaneous purchase from
such customer.
[68 FR 8700, Feb. 24, 2003]
Definition of ``Equity Security'' as Used in Sections 12(g) and 16
Sec. 240.3a11-1 Definition of the term ``equity security.''
The term equity security is hereby defined to include any stock or
similar security, certificate of interest or participation in any profit
sharing agreement, preorganization certificate or subscription,
transferable share, voting trust certificate or certificate of deposit
for an equity security, limited partnership interest, interest in a
joint venture, or certificate of interest in a business trust; any
security future on any such security; or any security convertible, with
or without consideration into such a security, or carrying any warrant
or right to subscribe to or purchase such a security; or any such
warrant or right; or any put, call, straddle, or other option or
privilege of buying such a security from or selling such a security to
another without being bound to do so.
[67 FR 19673, Apr. 23, 2002]
Miscellaneous Exemptions
Sec. 240.3a12-1 Exemption of certain mortgages and interests in
mortgages.
Mortgages, as defined in section 302(d) of the Emergency Home
Finance Act of 1970, which are or have been sold by the Federal Home
Loan Mortgage Corporation are hereby exempted from the operation of such
provisions of the Act as by their terms do not apply to an ``exempted
security'' or to ``exempted securities''.
(Sec. 3(a)(12), 48 Stat. 882, 15 U.S.C. 78(c))
[37 FR 25167, Nov. 28, 1972]
Sec. 240.3a12-2 [Reserved]
Sec. 240.3a12-3 Exemption from sections 14(a), 14(b), 14(c), 14(f)
and 16 for securities of certain foreign issuers.
(a) Securities for which the filing of registration statements on
Form 18 [17 CFR 249.218] are authorized shall be exempt from the
operation of sections 14 and 16 of the Act.
(b) Securities registered by a foreign private issuer, as defined in
Rule 3b-4 (Sec. 240.3b-4 of this chapter), shall be exempt from
sections 14(a), 14(b), 14(c), 14(f) and 16 of the Act.
[44 FR 70137, Dec. 6, 1979, as amended at 47 FR 54780, Dec. 6, 1982; 56
FR 30067, July 1, 1991]
[[Page 28]]
Sec. 240.3a12-4 Exemptions from sections 15(a) and 15(c)(3) for
certain mortgage securities.
(a) When used in this Rule the following terms shall have the
meanings indicated:
(1) The term whole loan mortgage means an evidence of indebtedness
secured by mortgage, deed of trust, or other lien upon real estate or
upon leasehold interests therein where the entire mortgage, deed or
other lien is transferred with the entire evidence of indebtedness.
(2) The term aggregated whole loan mortgage means two or more whole
loan mortgages that are grouped together and sold to one person in one
transaction.
(3) The term participation interest means an undivided interest
representing one of only two such interests in a whole loan mortgage or
in an aggregated whole loan mortgage, provided that the other interest
is retained by the originator of such participation interest.
(4) The term commitment means a contract to purchase a whole loan
mortgage, an aggregated whole loan mortgage or a participation interest
which by its terms requires that the contract be fully executed within 2
years.
(5) The term mortgage security means a whole loan mortgage, an
aggregated whole loan mortgage, a participation interest, or a
commitment.
(b) A mortgage security shall be deemed an ``exempted security'' for
purposes of subsections (a) and (c)(3) of section 15 of the Act provided
that, in the case of and at the time of any sale of the mortgage
security by a broker or dealer, such mortgage security is not in default
and has an unpaid principal amount of at least $50,000.
[39 FR 19945, June 5, 1974]
Sec. 240.3a12-5 Exemption of certain investment contract securities
from sections 7(c) and 11(d)(1).
(a) An investment contract security involving the direct ownership
of specified residential real property shall be exempted from the
provisions of sections 7(c) and 11(d)(1) of the Act with respect to any
transaction by a broker or dealer who, directly or indirectly, arranges
for the extension or maintenance of credit on the security to or from a
customer, if the credit:
(1) Is secured by a lien, mortgage, deed of trust, or any other
similar security interest related only to real property: Provided,
however, That this provision shall not prevent a lender from requiring
(i) a security interest in the common areas and recreational facilities
or furniture and fixtures incidental to the investment contract if the
purchase of such furniture and fixtures is required by, or subject to
the approval of, the issuer, as a condition of purchase; or (ii) an
assignment of future rentals in the event of default by the purchaser or
a co-signer or guarantor on the debt obligation other than the issuer,
its affiliates, or any broker or dealer offering such securities;
(2) Is to be repaid by periodic payments of principal and interest
pursuant to an amortization schedule established by the governing
instruments: Provided, however, That this provision shall not prevent
the extension of credit on terms which require the payment of interest
only, if extended in compliance with the other provisions of this rule;
and
(3) Is extended by a lender which is not, directly or indirectly
controlling, controlled by, or under common control with the broker or
dealer or the issuer of the securities or affiliates thereof.
(b) For purposes of this rule:
(1) Residential real property shall mean real property containing
living accommodations, whether used on a permanent or transient basis,
and may include furniture or fixtures if required as a condition of
purchase of the investment contract or if subject to the approval of the
issuer.
(2) Direct ownership shall mean ownership of a fee or leasehold
estate or a beneficial interest in a trust the purchase of which, under
applicable local law, is financed and secured by a security interest
therein similar to a mortgage or deed of trust, but it shall not include
an interest in a real estate investment trust, an interest in a general
[[Page 29]]
or limited partnership, or similar indirect interest in the ownership of
real property.
(Sec. 3(a)(12), 48 Stat. 882, as amended 84 Stat. 718, 1435, 1499 (15
U.S.C. 78c(12)); sec. 7(c), 48 Stat. 886, as amended 82 Stat. 452 (15
U.S.C. 78g(c)); sec. 11(d)(1), 48 Stat. 891 as amended 68 Stat. 636 (15
U.S.C. 78k(d)(1)); sec. 15(c), 48 Stat. 895, as amended 52 Stat. 1075,
84 Stat. 1653 (15 U.S.C. 78o(c)); sec. 23(a), 48 Stat. 901, as amended
49 Stat. 704, 1379 (15 U.S.C. 78w(a)))
[40 FR 6646, Feb. 13, 1975]
Sec. 240.3a12-6 Definition of ``common trust fund'' as used in section
3(a)(12) of the Act.
The term common trust fund as used in section 3(a)(12) of the Act
(15 U.S.C. 78c(a)(12)) shall include a common trust fund which is
maintained by a bank which is a member of an affiliated group, as
defined in section 1504(a) of the Internal Revenue Code of 1954 (26
U.S.C. 1504(a)), and which is maintained exclusively for the collective
investment and reinvestment of monies contributed thereto by one or more
bank members of such affiliated group in the capacity of trustee,
executor, administrator, or guardian; Provided, That:
(a) The common trust fund is operated in compliance with the same
state and federal regulatory requirements as would apply if the bank
maintaining such fund and any other contributing banks were the same
entity; and
(b) The rights of persons for whose benefit a contributing bank acts
as trustee, executor, administrator, or guardian would not be diminished
by reason of the maintenance of such common trust fund by another bank
member of the affiliated group.
(15 U.S.C. 78c(b))
[43 FR 2392, Jan. 17, 1978]
Sec. 240.3a12-7 Exemption for certain derivative securities traded
otherwise than on a national securities exchange.
Any put, call, straddle, option, or privilege traded exclusively
otherwise than on a national securities exchange and for which
quotations are not disseminated through an automated quotation system of
a registered securities association, which relates to any securities
which are direct obligations of, or obligations guaranteed as to
principal or interest by, the United States, or securities issued or
guaranteed by a corporation in which the United States has a direct or
indirect interest as shall be designated for exemption by the Secretary
of the Treasury pursuant to section 3(a)(12) of the Act, shall be exempt
from all provisions of the Act which by their terms do not apply to any
``exempted security'' or ``exempted securities,'' provided that the
securities underlying such put, call, straddle, option or privilege
represent an obligation equal to or exceeding $250,000 principal amount.
(15 U.S.C. 78a et seq., and particularly secs. 3(a)(12), 15(a)(2) and
23(a) (15 U.S.C. 78c(a)(12), 78o(a)(2) and 78w(a)))
[49 FR 5073, Feb. 10, 1984]
Sec. 240.3a12-8 Exemption for designated foreign government securities
for purposes of futures trading.
(a) When used in this Rule, the following terms shall have the
meaning indicated:
(1) The term designated foreign government security shall mean a
security not registered under the Securities Act of 1933 nor the subject
of any American depositary receipt so registered, and representing a
debt obligation of the government of
(i) The United Kingdom of Great Britain and Northern Ireland;
(ii) Canada;
(iii) Japan;
(iv) The Commonwealth of Australia;
(v) The Republic of France;
(vi) New Zealand;
(vii) The Republic of Austria;
(viii) The Kingdom of Denmark;
(ix) The Republic of Finland;
(x) The Kingdom of the Netherlands;
(xi) Switzerland;
(xii) The Federal Republic of Germany;
(xiii) The Republic of Ireland;
(xiv) The Republic of Italy;
(xv) The Kingdom of Spain;
(xvi) The United Mexican States;
(xvii) The Federative Republic of Brazil;
(xviii) The Republic of Argentina;
(xix) The Republic of Venezuela;
(xx) The Kingdom of Belgium; or
(xxi) The Kingdom of Sweden.
[[Page 30]]
(2) The term qualifying foreign futures contracts shall mean any
contracts for the purchase or sale of a designated foreign government
security for future delivery, as ``future delivery'' is defined in 7
U.S.C. 2, provided such contracts require delivery outside the United
States, any of its possessions or territories, and are traded on or
through a board of trade, as defined at 7 U.S.C. 2.
(b) Any designated foreign government security shall, for purposes
only of the offer, sale or confirmation of sale of qualifying foreign
futures contracts, be exempted from all provisions of the Act which by
their terms do not apply to an ``exempted security'' or ``exempted
securities.''
(15 U.S.C. 78a et seq., and particularly secs. 3(a)(12), and 23(a) 15
U.S.C. 78c(a)(12), and 78w(a))
[49 FR 8599, Mar. 8, 1984, as amended at 51 FR 25998, July 18, 1986; 52
FR 8877, Mar. 20, 1987; 52 FR 42279, Nov. 4, 1987; 53 FR 43863, Oct. 31,
1988; 57 FR 1378, Jan. 14, 1992; 59 FR 54815, Nov. 2, 1994; 60 FR 62326,
Dec. 6, 1995; 61 FR 10274, Mar. 13, 1996; 64 FR 10567, Mar. 5, 1999; 64
FR 29553, June 2, 1999
Sec. 240.3a12-9 Exemption of certain direct participation program
securities from the arranging provisions of sections 7(c) and 11(d)(1).
(a) Direct participation program securities sold on a basis whereby
the purchase price is paid to the issuer in one or more mandatory
deferred payments shall be deemed to be exempted securities for purposes
of the arranging provisions of sections 7(c) and 11(d)(1) of the Act,
provided that:
(1) The securities are registered under the Securities Act of 1933
or are sold or offered exclusively on an intrastate basis in reliance
upon section 3(a)(11) of that Act;
(2) The mandatory deferred payments bear a reasonable relationship
to the capital needs and program objectives described in a business
development plan disclosed to investors in a registration statement
filed with the Commission under the Securities Act of 1933 or, where no
registration statement is required to be filed with the Commission, as
part of a statement filed with the relevant state securities
administrator;
(3) Not less than 50 percent of the purchase price of the direct
participation program security is paid by the investor at the time of
sale;
(4) The total purchase price of the direct participation program
security is due within three years in specified property programs or two
years in non-specified property programs. Such pay-in periods are to be
measured from the earlier of the completion of the offering or one year
following the effective date of the offering.
(b) For purposes of this rule:
(1) Direct participation program shall mean a program financed
through the sale of securities, other than securities that are listed on
an exchange, quoted on NASDAQ, or will otherwise be actively traded
during the pay-in period as a result of efforts by the issuer,
underwriter, or other participants in the initial distribution of such
securities, that provides for flow-through tax consequences to its
investors; Provided, however, That the term ``direct participation
program'' does not include real estate investment trusts, Subchapter S
corporate offerings, tax qualified pension and profit sharing plans
under sections 401 and 403(a) of the Internal Revenue Code (``Code''),
tax shelter annuities under section 403(b) of the Code, individual
retirement plans under section 408 of the Code, and any issuer,
including a separate account, that is registered under the Investment
Company Act of 1940.
(2) Business development plan shall mean a specific plan describing
the program's anticipated economic development and the amounts of future
capital contributions, in the form of mandatory deferred payments, to be
required at specified times or upon the occurrence of certain events.
(3) Specified property program shall mean a direct participation
program in which, at the date of effectiveness, more than 75 percent of
the net proceeds from the sale of program securities are committed to
specific purchases or expenditures. Non-specified property program shall
mean any other direct participation program.
[51 FR 8801, Mar. 14, 1986]
[[Page 31]]
Sec. 240.3a12-10 Exemption of certain securities issued by the
Resolution Funding Corporation.
Securities that are issued by the Resolution Funding Corporation
pursuant to section 21B(f) of the Federal Home Loan Bank Act (12 U.S.C.
1421 et seq.) are exempt from the operation of all provisions of the Act
that by their terms do not apply to any ``exempted security'' or to
``exempted securities.''
[54 FR 37789, Sept. 13, 1989]
Sec. 240.3a12-11 Exemption from sections 8(a), 14(a), 14(b), and 14(c)
for debt securities listed on a national securities exchange.
(a) Debt securities that are listed for trading on a national
securities exchange shall be exempt from the restrictions on borrowing
of section 8(a) of the Act (15 U.S.C. 78h(a)).
(b) Debt securities registered pursuant to the provisions of section
12(b) of the Act (15 U.S.C. 78l(b)) shall be exempt from sections 14(a),
14(b), and 14(c) of the Act (15 U.S.C. 78n(a), (b), and (c)), except
that Sec. Sec. 240.14a-1, 240.14a-2(a), 240.14a-9, 240.14a-13, 240.14b-
1, 240.14b-2, 240.14c-1, 240.14c-6 and 240.14c-7 shall continue to
apply.
(c) For purposes of this section, debt securities is defined to mean
any securities that are not ``equity securities'' as defined in section
3(a)(11) of the Act (15 U.S.C. 78c(a)(11)) and Sec. 240.3a11-1
thereunder.
[59 FR 55347, Nov. 7, 1994]
Sec. 240.3a12-12 Exemption from certain provisions of section 16 of
the Act for asset-backed securities.
Asset-backed securities, as defined in Sec. 229.1101 of this
chapter, are exempt from section 16 of the Act (15 U.S.C. 78p).
[70 FR 1620, Jan. 7, 2005]
Sec. 240.3a40-1 Designation of financial responsibility rules.
The term financial responsibility rules for purposes of the
Securities Investor Protection Act of 1970 shall include:
(a) Any rule adopted by the Commission pursuant to sections 8,
15(c)(3), 17(a) or 17(e)(1)(A) of the Securities Exchange Act of 1934;
(b) Any rule adopted by the Commission relating to hypothecation or
lending of customer securities;
(c) Any rule adopted by any self-regulatory organization relating to
capital, margin, recordkeeping, hypothecation or lending requirements;
and
(d) Any other rule adopted by the Commission or any self-regulatory
organization relating to the protection of funds or securities.
(Secs. 3, 15(c)(3), 17(a) and 23 (15 U.S.C. 78c, 78o, 78q(a) and 78u))
[44 FR 28318, May 15, 1979]
Sec. 240.3a43-1 Customer-related government securities activities
incidental to the futures-related business of a futures commission
merchant registered with the Commodity Futures Trading Commission.
(a) A futures commission merchant registered with the Commodity
Futures Trading Commission (``CFTC'') is not a government securities
broker or government securities dealer solely because such futures
commission merchant effects transactions in government securities that
are defined in paragraph (b) of this section as incidental to such
person's futures-related business.
(b) Provided that the futures commission merchant maintains in a
regulated account all funds and securities associated with such
government securities transactions (except funds and securities
associated with transactions under paragraph (b)(1)(i) of this section
and does not advertise that it is in the business of effecting
transactions in government securities otherwise than in connection with
futures or options on futures trading or the investment of margin or
excess funds related to such trading or the trading of any other
instrument subject to CFTC jurisdiction, the following transactions in
government securities are incidental to the futures-related business of
such a futures commission merchant:
(1) Transactions as agent for a customer--
(i) To effect delivery pursuant to a futures contract; or
(ii) For risk reduction or arbitrage of existing or
contemporaneously created postions in futures or options on futures;
[[Page 32]]
(2) Transactions as agent for a customer for investment of margin
and excess funds related to futures or options on futures trading or the
trading of other instruments subject to CFTC jurisdiction, provided
further that,
(i) Such transactions involve Treasury securities with a maturity of
less than 93 days at the time of the transation.
(ii) Such transactions generate no monetary profit for the futures
commission merchant in excess of the costs of executing such
transactions, or
(iii) Such transactions are unsolicited, and commissions and other
income generated on transactions pursuant to this paragraph (b)(2)(iii)
(including transactional fees paid by the futures commission merchant
and charged to its customer) do not exceed 2% of such futures commission
merchant's total commission revenues;
(3) Exchange of futures for physicals transactions as agent for or
as principal with a customer; and
(4) Any transaction or transactions that the Commission exempts,
either unconditionally or on specified terms and conditions, as
incidental to the futures-related business of a specified futures
commission merchant, a specified category of futures commission
merchants, or futures commission merchants generally.
(c) Definitions. (1) Customer means any person for whom the futures
commission merchant effects or intends to effect transactions in
futures, options on futures, or any other instruments subject to CFTC
jurisdiction.
(2) Regulated account means a customer segregation account subject
to the regulations of the CFTC; provided, however, that, where such
regulations do not permit to be maintained in such an account or require
to be maintained in a separate regulated account funds or securities in
proprietary accounts or funds or securities used as margin for or excess
funds related to futures contracts, options on futures or any other
instruments subject to CFTC jurisdiction that trade outside the United
States, its territories, or possessions, the term regulated account
means such separate regulated account or any other account subject to
record-keeping regulations of the CFTC.
(3) Unsolicited transaction means a transaction that is not effected
in a discretionary account or recommended to a customer by the futures
commission merchant, an associated person of a futures commission
merchant, a business affiliate that is controlled by, controlling, or
under common control with the futures commission merchant, or an
introducing broker that is guaranteed by the futures commission
merchant.
(4) Futures and futures contracts mean contracts of sale of a
commodity for future delivery traded on or subject to the rules of a
contract market designated by the CFTC or traded on or subject to the
rules of any board of trade located outside the United States, its
territories, or possessions.
(5) Options on futures means puts or calls on a futures contract
traded on or subject to the rules of a contract market designated by the
CFTC or traded or subject to the rules of any board of trade located
outside the United States, its territories, or possessions.
[52 FR 27969, July 24, 1987]
Sec. 240.3a44-1 Proprietary government securities transactions
incidental to the futures-related business of a CFTC-regulated person.
(a) A person registered with the Commodity Futures Trading
Commission (``CFTC''), a contract market designated by the CFTC, such a
contract market's affiliated clearing organization, or any floor trader
or such a contract market (hereinafter referred to collectively as a
``CFTC-regulated person'') is not a government securities dealer solely
because such person effects transactions for its own account in
government securities that are defined in paragraph (b) of this section
as incidental to such person's futures-related business.
(b) Provided that a CFTC-regulated person does not advertise or
otherwise hold itself out as a government securities dealer except as
permitted under rule 3a43-1 (Sec. 240.3a43-1) the following
transactions in government securities for its own account are incidental
to the futures-related business of such a CFTC-regulated person:
[[Page 33]]
(1) Transactions to effect delivery of a government security
pursuant to a futures contract;
(2) Exchange of futures for physicals transactions with (i) a
government securities broker or government securities dealer that has
registered with the Commission or filed notice pursuant to section
15C(a) of the Act or (ii) a CFTC-regulated person;
(3) Transactions (including repurchase agreements and reverse
repurchase agreements) involving segregated customer funds and
securities or funds and securities held by a clearing organization with
(i) a government securities broker or government securities dealer that
has registered with the Commission of filed notice pursuant to section
15C(a) of the Act or (ii) a bank;
(4) Transactions for risk reduction or arbitrage of existing or
contemporaneously created positions in futures or options on futures
with (i) a government securities broker or government securities dealer
that has registered with the Commission or filed notice pursuant to
section 15C(a) of the Act or (ii) a CFTC-regulated person;
(5) Repurchase and reverse repurchase agreement transactions between
a futures commission merchant acting in a proprietary capacity and
another CFTC-regulated person acting in a proprietary capacity and
contemporaneous offsetting transactions between such a futures
commission merchant and (i) a government securities broker or government
securities dealer that has registered with the Commission or filed
notice pursuant to section 15C(a) of the Act, (ii) a bank, or (iii) a
CFTC-regulated person acting in a proprietary capacity; and
(6) Any transaction or transactions that the Commission exempts,
either unconditionally or on specified terms and conditions, as
incidental to the futures related business of a specified CFTC-regulated
person, a specified category of CFTC-regulated persons, or CFTC-
regulated persons generally.
(c) Definitions. (1) Segregated customer funds means funds subject
to CFTC segregation requirements.
(2) Futures and futures contracts means contracts of sale of a
commodity for future delivery traded on or subject to the rules of a
contract market designated by the CFTC or traded on or subject to the
rules of any board of trade located outside the United States, its
territories, or possessions.
(3) Options on futures means puts or calls on a futures contract
traded on or subject to the rules of a contract market designated by the
CFTC or traded on or subject to the rules of any board of trade located
outside the United States, its territories, or possessions.
[52 FR 27970, July 24, 1987]
Sec. 240.3a51-1 Definition of ``penny stock''.
For purposes of section 3(a)(51) of the Act, the term ``penny
stock'' shall mean any equity security other than a security:
(a) That is an NMS stock, as defined in Sec. 242.600(b)(47),
provided that:
(1) The security is registered, or approved for registration upon
notice of issuance, on a national securities exchange that has been
continuously registered as a national securities exchange since April
20, 1992 (the date of the adoption of Rule 3a51-1 (Sec. 240.3a51-1) by
the Commission); and the national securities exchange has maintained
quantitative listing standards that are substantially similar to or
stricter than those listing standards that were in place on that
exchange on January 8, 2004; or
(2) The security is registered, or approved for registration upon
notice of issuance, on a national securities exchange, or is listed, or
approved for listing upon notice of issuance on, an automated quotation
system sponsored by a registered national securities association, that:
(i) Has established initial listing standards that meet or exceed
the following criteria:
(A) The issuer shall have:
(1) Stockholders' equity of $5,000,000;
(2) Market value of listed securities of $50 million for 90
consecutive days prior to applying for the listing (market value means
the closing bid price multiplied by the number of securities listed); or
(3) Net income of $750,000 (excluding extraordinary or non-recurring
items) in the most recently completed fiscal
[[Page 34]]
year or in two of the last three most recently completed fiscal years;
(B) The issuer shall have an operating history of at least one year
or a market value of listed securities of $50 million (market value
means the closing bid price multiplied by the number of securities
listed);
(C) The issuer's stock, common or preferred, shall have a minimum
bid price of $4 per share;
(D) In the case of common stock, there shall be at least 300 round
lot holders of the security (a round lot holder means a holder of a
normal unit of trading);
(E) In the case of common stock, there shall be at least 1,000,000
publicly held shares and such shares shall have a market value of at
least $5 million (market value means the closing bid price multiplied by
number of publicly held shares, and shares held directly or indirectly
by an officer or director of the issuer and by any person who is the
beneficial owner of more than 10 percent of the total shares outstanding
are not considered to be publicly held);
(F) In the case of a convertible debt security, there shall be a
principal amount outstanding of at least $10 million;
(G) In the case of rights and warrants, there shall be at least
100,000 issued and the underlying security shall be registered on a
national securities exchange or listed on an automated quotation system
sponsored by a registered national securities association and shall
satisfy the requirements of paragraph (a) or (e) of this section;
(H) In the case of put warrants (that is, instruments that grant the
holder the right to sell to the issuing company a specified number of
shares of the company's common stock, at a specified price until a
specified period of time), there shall be at least 100,000 issued and
the underlying security shall be registered on a national securities
exchange or listed on an automated quotation system sponsored by a
registered national securities association and shall satisfy the
requirements of paragraph (a) or (e) of this section;
(I) In the case of units (that is, two or more securities traded
together), all component parts shall be registered on a national
securities exchange or listed on an automated quotation system sponsored
by a registered national securities association and shall satisfy the
requirements of paragraph (a) or (e) of this section; and
(J) In the case of equity securities (other than common and
preferred stock, convertible debt securities, rights and warrants, put
warrants, or units), including hybrid products and derivative securities
products, the national securities exchange or registered national
securities association shall establish quantitative listing standards
that are substantially similar to those found in paragraphs (a)(2)(i)(A)
through (a)(2)(i)(I) of this section; and
(ii) Has established quantitative continued listing standards that
are reasonably related to the initial listing standards set forth in
paragraph (a)(2)(i) of this section, and that are consistent with the
maintenance of fair and orderly markets;
(b) That is issued by an investment company registered under the
Investment Company Act of 1940;
(c) That is a put or call option issued by the Options Clearing
Corporation;
(d) Except for purposes of section 7(b) of the Securities Act and
Rule 419 (17 CFR 230.419), that has a price of five dollars or more;
(1) For purposes of paragraph (d) of this section:
(i) A security has a price of five dollars or more for a particular
transaction if the security is purchased or sold in that transaction at
a price of five dollars or more, excluding any broker or dealer
commission, commission equivalent, mark-up, or mark-down; and
(ii) Other than in connection with a particular transaction, a
security has a price of five dollars or more at a given time if the
inside bid quotation is five dollars or more; provided, however, that if
there is no such inside bid quotation, a security has a price of five
dollars or more at a given time if the average of three or more
interdealer bid quotations at specified prices displayed at that time in
an interdealer quotation system, as defined in 17 CFR 240.15c2-7(c)(1),
by three or more market makers in the security, is five dollars or more.
[[Page 35]]
(iii) The term ``inside bid quotation'' shall mean the highest bid
quotation for the security displayed by a market maker in the security
on an automated interdealer quotation system that has the
characteristics set forth in section 17B(b)(2) of the Act, or such other
automated interdealer quotation system designated by the Commission for
purposes of this section, at any time in which at least two market
makers are contemporaneously displaying on such system bid and offer
quotations for the security at specified prices.
(2) If a security is a unit composed of one or more securities, the
unit price divided by the number of shares of the unit that are not
warrants, options, rights, or similar securities must be five dollars or
more, as determined in accordance with paragraph (d)(1) of this section,
and any share of the unit that is a warrant, option, right, or similar
security, or a convertible security, must have an exercise price or
conversion price of five dollars or more;
(e)(1) That is registered, or approved for registration upon notice
of issuance, on a national securities exchange that makes transaction
reports available pursuant to Sec. 242.601, provided that:
(i) Price and volume information with respect to transactions in
that security is required to be reported on a current and continuing
basis and is made available to vendors of market information pursuant to
the rules of the national securities exchange;
(ii) The security is purchased or sold in a transaction that is
effected on or through the facilities of the national securities
exchange, or that is part of the distribution of the security; and
(iii) The security satisfies the requirements of paragraph (a)(1) or
(a)(2) of this section;
(2) A security that satisfies the requirements of this paragraph
(e), but does not otherwise satisfy the requirements of paragraph (a),
(b), (c), (d), (f), or (g) of this section, shall be a penny stock for
purposes of section 15(b)(6) of the Act (15 U.S.C. 78o(b)(6));
(f) That is a security futures product listed on a national
securities exchange or an automated quotation system sponsored by a
registered national securities association; or
(g) Whose issuer has:
(1) Net tangible assets (i.e., total assets less intangible assets
and liabilities) in excess of $2,000,000, if the issuer has been in
continuous operation for at least three years, or $5,000,000, if the
issuer has been in continuous operation for less than three years; or
(2) Average revenue of at least $6,000,000 for the last three years.
(3) For purposes of paragraph (g) of this section, net tangible
assets or average revenues must be demonstrated by financial statements
dated less than fifteen months prior to the date of the transaction that
the broker or dealer has reviewed and has a reasonable basis for
believing are accurate in relation to the date of the transaction, and:
(i) If the issuer is other than a foreign private issuer, are the
most recent financial statements for the issuer that have been audited
and reported on by an independent public accountant in accordance with
the provisions of 17 CFR 210.2-02; or
(ii) If the issuer is a foreign private issuer, are the most recent
financial statements for the issuer that have been filed with the
Commission or furnished to the Commission pursuant to 17 CFR 240.12g3-
2(b); provided, however, that if financial statements for the issuer
dated less than fifteen months prior to the date of the transaction have
not been filed with or furnished to the Commission, financial statements
dated within fifteen months prior to the transaction shall be prepared
in accordance with generally accepted accounting principles in the
country of incorporation, audited in compliance with the requirements of
that jurisdiction, and reported on by an accountant duly registered and
in good standing in accordance with the regulations of that
jurisdiction.
(4) The broker or dealer shall preserve, as part of its records,
copies of the financial statements required by paragraph (g)(3) of this
section for the period specified in 17 CFR 240.17a-4(b).
[57 FR 18032, Apr. 28, 1992, as amended at 58 FR 58101, Oct. 29, 1993;
70 FR 40631, July 13, 2005; 70 FR 46090, Aug. 9, 2005]
[[Page 36]]
Sec. 240.3a55-1 Method for determining market capitalization and
dollar value of average daily trading volume; application of the
definition of narrow-based security index.
(a) Market capitalization. For purposes of Section
3(a)(55)(C)(i)(III)(bb) of the Act (15 U.S.C.
78c(a)(55)(C)(i)(III)(bb)):
(1) On a particular day, a security shall be 1 of 750 securities
with the largest market capitalization as of the preceding 6 full
calendar months when it is included on a list of such securities
designated by the Commission and the CFTC as applicable for that day.
(2) In the event that the Commission and the CFTC have not
designated a list under paragraph (a)(1) of this section:
(i) The method to be used to determine market capitalization of a
security as of the preceding 6 full calendar months is to sum the values
of the market capitalization of such security for each U.S. trading day
of the preceding 6 full calendar months, and to divide this sum by the
total number of such trading days.
(ii) The 750 securities with the largest market capitalization shall
be identified from the universe of all NMS securities as defined in
Sec. 242.600 of this chapter that are common stock or depositary
shares.
(b) Dollar value of ADTV. (1) For purposes of Section 3(a)(55)(B) of
the Act (15 U.S.C. 78c(a)(55)(B)):
(i)(A) The method to be used to determine the dollar value of ADTV
of a security is to sum the dollar value of ADTV of all reported
transactions in such security in each jurisdiction as calculated
pursuant to paragraphs (b)(1)(ii) and (iii).
(B) The dollar value of ADTV of a security shall include the value
of all reported transactions for such security and for any depositary
share that represents such security.
(C) The dollar value of ADTV of a depositary share shall include the
value of all reported transactions for such depositary share and for the
security that is represented by such depositary share.
(ii) For trading in a security in the United States, the method to
be used to determine the dollar value of ADTV as of the preceding 6 full
calendar months is to sum the value of all reported transactions in such
security for each U.S. trading day during the preceding 6 full calendar
months, and to divide this sum by the total number of such trading days.
(iii)(A) For trading in a security in a jurisdiction other than the
United States, the method to be used to determine the dollar value of
ADTV as of the preceding 6 full calendar months is to sum the value in
U.S. dollars of all reported transactions in such security in such
jurisdiction for each trading day during the preceding 6 full calendar
months, and to divide this sum by the total number of trading days in
such jurisdiction during the preceding 6 full calendar months.
(B) If the value of reported transactions used in calculating the
ADTV of securities under paragraph (b)(1)(iii)(A) is reported in a
currency other than U.S. dollars, the total value of each day's
transactions in such currency shall be converted into U.S. dollars on
the basis of a spot rate of exchange for that day obtained from at least
one independent entity that provides or disseminates foreign exchange
quotations in the ordinary course of its business.
(iv) The dollar value of ADTV of the lowest weighted 25% of an index
is the sum of the dollar value of ADTV of each of the component
securities comprising the lowest weighted 25% of such index.
(2) For purposes of Section 3(a)(55)(C)(i)(III)(cc) of the Act (15
U.S.C. 78c(a)(55)(C)(i)(III)(cc)):
(i) On a particular day, a security shall be 1 of 675 securities
with the largest dollar value of ADTV as of the preceding 6 full
calendar months when it is included on a list of such securities
designated by the Commission and the CFTC as applicable for that day.
(ii) In the event that the Commission and the CFTC have not
designated a list under paragraph (b)(2) of this section:
(A) The method to be used to determine the dollar value of ADTV of a
security as of the preceding 6 full calendar months is to sum the value
of all reported transactions in such security
[[Page 37]]
in the United States for each U.S. trading day during the preceding 6
full calendar months, and to divide this sum by the total number of such
trading days.
(B) The 675 securities with the largest dollar value of ADTV shall
be identified from the universe of all NMS securities as defined in
Sec. 242.600 of this chapter that are common stock or depositary
shares.
(c) Depositary Shares and Section 12 Registration. For purposes of
Section 3(a)(55)(C) of the Act (15 U.S.C. 78c(a)(55)(C)), the
requirement that each component security of an index be registered
pursuant to Section 12 of the Act (15 U.S.C. 78l) shall be satisfied
with respect to any security that is a depositary share if the deposited
securities underlying the depositary share are registered pursuant to
Section 12 of the Act and the depositary share is registered under the
Securities Act of 1933 (15 U.S.C. 77a et seq.) on Form F-6 (17 CFR
239.36).
(d) Definitions. For purposes of this section:
(1) CFTC means Commodity Futures Trading Commission.
(2) Closing price of a security means:
(i) If reported transactions in the security have taken place in the
United States, the price at which the last transaction in such security
took place in the regular trading session of the principal market for
the security in the United States.
(ii) If no reported transactions in a security have taken place in
the United States, the closing price of such security shall be the
closing price of any depositary share representing such security divided
by the number of shares represented by such depositary share.
(iii) If no reported transactions in a security or in a depositary
share representing such security have taken place in the United States,
the closing price of such security shall be the price at which the last
transaction in such security took place in the regular trading session
of the principal market for the security. If such price is reported in a
currency other than U.S. dollars, such price shall be converted into
U.S. dollars on the basis of a spot rate of exchange relevant for the
time of the transaction obtained from at least one independent entity
that provides or disseminates foreign exchange quotations in the
ordinary course of its business.
(3) Depositary share has the same meaning as in Sec. 240.12b-2.
(4) Foreign financial regulatory authority has the same meaning as
in Section 3(a)(52) of the Act (15 U.S.C. 78c(a)(52)).
(5) Lowest weighted 25% of an index. With respect to any particular
day, the lowest weighted component securities comprising, in the
aggregate, 25% of an index's weighting for purposes of Section
3(a)(55)(B)(iv) of the Act (15 U.S.C. 78c(a)(55)(B)(iv)) (``lowest
weighted 25% of an index'') means those securities:
(i) That are the lowest weighted securities when all the securities
in such index are ranked from lowest to highest based on the index's
weighting methodology; and
(ii) For which the sum of the weight of such securities is equal to,
or less than, 25% of the index's total weighting.
(6) Market capitalization of a security on a particular day:
(i) If the security is not a depositary share, is the product of:
(A) The closing price of such security on that same day; and
(B) The number of outstanding shares of such security on that same
day.
(ii) If the security is a depositary share, is the product of:
(A) The closing price of the depositary share on that same day
divided by the number of deposited securities represented by such
depositary share; and
(B) The number of outstanding shares of the security represented by
the depositary share on that same day.
(7) Outstanding shares of a security means the number of outstanding
shares of such security as reported on the most recent Form 10-K, Form
10-Q, Form 10-KSB, Form 10-QSB, or Form 20-F (17 CFR 249.310, 249.308a,
249.310b, 249.308b, or 249.220f) filed with the Commission by the issuer
of such security, including any change to such number of outstanding
shares subsequently reported by the issuer on a Form 8-K (17 CFR
249.308).
(8) Preceding 6 full calendar months means, with respect to a
particular day, the period of time beginning on the same day of the
month 6 months
[[Page 38]]
before and ending on the day prior to such day.
(9) Principal market for a security means the single securities
market with the largest reported trading volume for the security during
the preceding 6 full calendar months.
(10) Reported transaction means:
(i) With respect to securities transactions in the United States,
any transaction for which a transaction report is collected, processed,
and made available pursuant to an effective transaction reporting plan,
or for which a transaction report, last sale data, or quotation
information is disseminated through an automated quotation system as
described in Section 3(a)(51)(A)(ii) of the Act (15 U.S.C.
78c(a)(51)(A)(ii); and
(ii) With respect to securities transactions outside the United
States, any transaction that has been reported to a foreign financial
regulatory authority in the jurisdiction where such transaction has
taken place.
(11) U.S. trading day means any day on which a national securities
exchange is open for trading.
(12) Weighting of a component security of an index means the
percentage of such index's value represented, or accounted for, by such
component security.
[66 FR 44514, Aug. 23, 2001, as amended at 70 FR 43750, July 29, 2005]
Sec. 240.3a55-2 Indexes underlying futures contracts trading for
fewer than 30 days.
(a) An index on which a contract of sale for future delivery is
trading on a designated contract market, registered derivatives
transaction execution facility, or foreign board of trade is not a
narrow-based security index under Section 3(a)(55) of the Act (15 U.S.C.
78c(a)(55)) for the first 30 days of trading, if:
(1) Such index would not have been a narrow-based security index on
each trading day of the preceding 6 full calendar months with respect to
a date no earlier than 30 days prior to the commencement of trading of
such contract;
(2) On each trading day of the preceding 6 full calendar months with
respect to a date no earlier than 30 days prior to the commencement of
trading such contract:
(i) Such index had more than 9 component securities;
(ii) No component security in such index comprised more than 30
percent of the index's weighting;
(iii) The 5 highest weighted component securities in such index did
not comprise, in the aggregate, more than 60 percent of the index's
weighting; and
(iv) The dollar value of the trading volume of the lowest weighted
25% of such index was not less than $50 million (or in the case of an
index with 15 or more component securities, $30 million); or
(3) On each trading day of the preceding 6 full calendar months,
with respect to a date no earlier than 30 days prior to the commencement
of trading such contract:
(i) Such index had at least 9 component securities;
(ii) No component security in such index comprised more than 30
percent of the index's weighting; and
(iii) Each component security in such index was:
(A) Registered pursuant to Section 12 of the Act (15 U.S.C. 78) or
was a depositary share representing a security registered pursuant to
Section 12 of the Act;
(B) 1 of 750 securities with the largest market capitalization that
day; and
(C) 1 of 675 securities with the largest dollar value of trading
volume that day.
(b) An index that is not a narrow-based security index for the first
30 days of trading pursuant to paragraph (a) of this section, shall
become a narrow-based security index if such index has been a narrow-
based security index for more than 45 business days over 3 consecutive
calendar months.
(c) An index that becomes a narrow-based security index solely
because it was a narrow-based security index for more than 45 business
days over 3 consecutive calendar months pursuant to paragraph (b) of
this section shall not be a narrow-based security index for the
following 3 calendar months.
(d) Definitions. For purposes of this section:
(1) Market capitalization has the same meaning as in Sec. 240.3a55-
1(d)(6).
[[Page 39]]
(2) Dollar value of trading volume of a security on a particular day
is the value in U.S. dollars of all reported transactions in such
security on that day. If the value of reported transactions used in
calculating dollar value of trading volume is reported in a currency
other than U.S. dollars, the total value of each day's transactions
shall be converted into U.S. dollars on the basis of a spot rate of
exchange for that day obtained from at least one independent entity that
provides or disseminates foreign exchange quotations in the ordinary
course of its business.
(3) Lowest weighted 25% of an index has the same meaning as in Sec.
240.3a55-1(d)(5).
(4) Preceding 6 full calendar months has the same meaning as in
Sec. 240.3a55-1(d)(8).
(5) Reported transaction has the same meaning as in Sec. 240.3a55-
1(d)(10).
[66 FR 44514, Aug. 23, 2001]
Sec. 240.3a55-3 Futures contracts on security indexes trading on or
subject to the rules of a foreign board of trade.
When a contract of sale for future delivery on a security index is
traded on or subject to the rules of a foreign board of trade, such
index shall not be a narrow-based security index if it would not be a
narrow-based security index if a futures contract on such index were
traded on a designated contract market or registered derivatives
transaction execution facility.
[66 FR 44514, Aug. 23, 2001]
Definitions
Sec. 240.3b-1 Definition of ``listed''.
The term listed means admitted to full trading privileges upon
application by the issuer or its fiscal agent or, in the case of the
securities of a foreign corporation, upon application by a banker
engaged in distributing them; and includes securities for which
authority to add to the list on official notice of issuance has been
granted.
(Sec. 3, 48 Stat. 884; 15 U.S.C. 78c)
[13 FR 8179, Dec. 22, 1948]
Sec. 240.3b-2 Definition of ``officer''.
The term officer means a president, vice president, secretary,
treasury or principal financial officer, comptroller or principal
accounting officer, and any person routinely performing corresponding
functions with respect to any organization whether incorporated or
unincorporated.
[47 FR 11464, Mar. 16, 1982; 47 FR 11819, Mar. 19, 1982]
Sec. 240.3b-3 [Reserved]
Sec. 240.3b-4 Definition of ``foreign government,'' ``foreign issuer''
and ``foreign private issuer''.
(a) The term foreign government means the government of any foreign
country or of any political subdivision of a foreign country.
(b) The term foreign issuer means any issuer which is a foreign
government, a national of any foreign country or a corporation or other
organization incorporated or organized under the laws of any foreign
country.
(c) The term foreign private issuer means any foreign issuer other
than a foreign government except an issuer meeting the following
conditions:
(1) More than 50 percent of the issuer's outstanding voting
securities are directly or indirectly held of record by residents of the
United States; and
(2) Any of the following:
(i) The majority of the executive officers or directors are United
States citizens or residents;
(ii) More than 50 percent of the assets of the issuer are located in
the United States; or
(iii) The business of the issuer is administered principally in the
United States.
Instruction to paragraph (c)(1): To determine the percentage of
outstanding voting securities held by U.S. residents:
A. Use the method of calculating record ownership in Rule 12g3-2(a)
under the Act (Sec. 240.12g3-2(a)), except that your inquiry as to the
amount of shares represented by accounts of customers resident in the
United States may be limited to brokers, dealers, banks and other
nominees located in:
(1) The United States,
(2) Your jurisdiction of incorporation, and
(3) The jurisdiction that is the primary trading market for your
voting securities, if
[[Page 40]]
different than your jurisdiction of incorporation.
B. If, after reasonable inquiry, you are unable to obtain
information about the amount of shares represented by accounts of
customers resident in the United States, you may assume, for purposes of
this definition, that the customers are residents of the jurisdiction in
which the nominee has its principal place of business.
C. Count shares of voting securities beneficially owned by residents
of the United States as reported on reports of beneficial ownership
provided to you or filed publicly and based on information otherwise
provided to you.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48
Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 1, 79
Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13, 15(d), 23(a), 48
Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat. 1375, 1377, 1379; sec.
203(a), 49 Stat. 704; sec. 202, 68 Stat. 686; secs. 3, 4, 6, 78 Stat.
565-574; secs. 1, 2, 82 Stat. 454; sec. 28(c), 84 Stat. 1435; secs. 1,
2, 84 Stat. 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89
Stat. 117, 118, 119, 155; sec. 308(b), 90 Stat. 57; secs. 202, 203, 204,
91 Stat. 1494, 1498, 1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l,
78m, 78o(d), 78w(a))
[32 FR 7848, May 30, 1967, as amended at 48 FR 46739, Oct. 14, 1983; 64
FR 53912, Oct. 5, 1999]
Sec. 240.3b-5 Non-exempt securities issued under governmental
obligations.
(a) Any part of an obligation evidenced by any bond, note,
debenture, or other evidence of indebtedness issued by any governmental
unit specified in section 3(a)(12) of the Act which is payable from
payments to be made in respect of property or money which is or will be
used, under a lease, sale, or loan arrangement, by or for industrial or
commercial enterprise, shall be deemed to be a separate ``security''
within the meaning of section 3(a)(10) of the Act, issued by the lessee
or obligor under the lease, sale or loan arrangement.
(b) An obligation shall not be deemed a separate ``security'' as
defined in paragraph (a) of this section if, (1) the obligation is
payable from the general revenues of a governmental unit, specified in
section 3(a)(12) of the Act, having other resources which may be used
for the payment of the obligation, or (2) the obligation relates to a
public project or facility owned and operated by or on behalf of and
under the control of a governmental unit specified in such section, or
(3) the obligation relates to a facility which is leased to and under
the control of an industrial or commercial enterprise but is a part of a
public project which, as a whole, is owned by and under the general
control of a governmental unit specified in such section, or an
instrumentality thereof.
(c) This rule shall apply to transactions of the character described
in paragraph (a) of this section only with respect to bonds, notes,
debentures or other evidences of indebtedness sold after December 31,
1968.
(Sec. 3, 48 Stat. 882; 15 U.S.C. 78c, 77s)
[33 FR 12648, Sept. 6, 1968, as amended at 35 FR 6000, Apr. 11, 1970]
Sec. 240.3b-6 Liability for certain statements by issuers.
(a) A statement within the coverage of paragraph (b) of this section
which is made by or on behalf of an issuer or by an outside reviewer
retained by the issuer shall be deemed not to be a fraudulent statement
(as defined in paragraph (d) of this section), unless it is shown that
such statement was made or reaffirmed without a reasonable basis or was
disclosed other than in good faith.
(b) This rule applies to the following statements:
(1) A forward-looking statement (as defined in paragraph (c) of this
section) made in a document filed with the Commission, in Part I of a
quarterly report on Form 10-Q and Form 10-QSB, Sec. 249.308a of this
chapter, or in an annual report to share-holders meeting the
requirements of Rules 14a-3(b) and (c) or 14c-3(a) and (b) under the
Securities Exchange Act of 1934, a statement reaffirming such forward-
looking statement subsequent to the date the document was filed or the
annual report was made publicly available, or a forward-looking
statement made prior to the date the document was filed or the date the
annual report was made publicly available if such statement is
reaffirmed in a filed document, in Part I of a quarterly report on Form
10-Q and Form 10-QSB, or in an annual report made publicly available
within a reasonable time after the making of
[[Page 41]]
such forward-looking statement; Provided, That:
(i) At the time such statements are made or reaffirmed, either the
issuer is subject to the reporting requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934 and has complied with the
requirements of Rule 13a-1 or 15d-1 thereunder, if applicable, to file
its most recent annual report on Form 10-K and Form 10-KSB or Form 20-F
or Form 40-F; or if the issuer is not subject to the reporting
requirements of section 13(a) or 15(d) of the Securities Exchange Act of
1934, the statements are made in a registration statement filed under
the Securities Act of 1933 offering statement or solicitation of
interest written document or broadcast script under Regulation A or
pursuant to section 12 (b) or (g) of the Securities Exchange Act of
1934, and
(ii) The statements are not made by or on behalf of an issuer that
is an investment company registered under the Investment Company Act of
1940; and
(2) Information which is disclosed in a document filed with the
Commission in Part I of a quarterly report on Form 10-Q and Form 10-QSB
(Sec. 249.308a of this chapter) or in an annual report to shareholders
meeting the requirements of Rules 14a-3 (b) and (c) or 14c-3 (a) and (b)
under the Securities Exchange Act of 1934 (Sec. Sec. 240.14a-3 (b) and
(c) or 240.14c-3 (a) and (b) of this chapter) and which relates to (i)
the effects of changing prices on the business enterprise, presented
voluntarily or pursuant to Item 303 of Regulation S-K (Sec. 229.303 of
this chapter) or Regulation S-B (Sec. 228.303 of this chapter)
``Management's Discussion and Analysis of Financial Condition and
Results of Operations'' or Item 5 of Form 20-F, ``Operating and
Financial Review and Prospects'', or Item 302 of Regulation S-K (Sec.
229.302 of this chapter), ``Supplementary financial information,'' or
Rule 3-20(c) of Regulation S-X (Sec. 210.3-20(c)) of this chapter) or
(ii) the value of proved oil and gas reserves (such as a standardized
measure of discounted future net cash flows relating to proved oil and
gas reserves as set forth in paragraphs 30-34 of Statement of Financial
Accounting Standards No. 69) presented voluntarily or pursuant to Item
302 of Regulation S-K (Sec. 229.302 of this chapter).
(c) For the purpose of this rule, the term forward-looking statement
shall mean and shall be limited to:
(1) A statement containing a projection of revenues, income (loss),
earnings (loss) per share, capital expenditures, dividends, capital
structure or other financial items;
(2) A statement of management's plans and objectives for future
operations;
(3) A statement of future economic performance contained in
management's discussion and analysis of financial condition and results
of operations included pursuant to Item 303 of Regulation S-K (Sec.
229.303 of this chapter) or Item 5 of Form 20-F or
(4) Disclosed statements of the assumptions underlying or relating
to any of the statements described in paragraphs (c) (1), (2), or (3) of
this section.
(d) For the purpose of this rule the term fraudulent statement shall
mean a statement which is an untrue statement of a material fact, a
statement false or misleading with respect to any material fact, an
omission to state a material fact necessary to make a statement not
misleading, or which constitutes the employment of a manipulative,
deceptive, or fraudulent device, contrivance, scheme, transaction, act,
practice, course of business, or an artifice to defraud, as those terms
are used in the Securities Exchange Act of 1934 or the rules or
regulations promulgated thereunder.
[46 FR 13990, Feb. 25, 1981, as amended at 46 FR 19457, Mar. 31, 1981;
47 FR 11464, Mar. 16, 1982; 47 FR 54780, Dec. 6, 1982; 47 FR 57915, Dec.
29, 1982; 48 FR 19876, May 3, 1983; 56 FR 30067, July 1, 1991; 57 FR
36494, Aug. 13, 1992; 64 FR 53912, Oct. 5, 1999]
Sec. 240.3b-7 Definition of ``executive officer''.
The term executive officer, when used with reference to a
registrant, means its president, any vice president of the registrant in
charge of a principal business unit, division or function (such as
sales, administration or finance), any other officer who performs a
policy making function or any other person who performs similar policy
making
[[Page 42]]
functions for the registrant. Executive officers of subsidiaries may be
deemed executive officers of the registrant if they perform such policy
making functions for the registrant.
[47 FR 11464, Mar. 16, 1982, as amended at 56 FR 7265, Feb. 21, 1991]
Sec. 240.3b-8 Definitions of ``Qualified OTC Market Maker, Qualified
Third Market Maker'' and ``Qualified Block Positioner''.
For the purposes of Regulation U under the Act (12 CFR part 221):
(a) The term Qualified OTC Market Maker in an over-the-counter
(``OTC'') margin security means a dealer in any ``OTC Margin Security''
(as that term is defined in section 2(j) of Regulation U (12 CFR
221.2(j)) who (1) is a broker or dealer registered pursuant to section
15 of the Act, (2) is subject to and is in compliance with Rule 15c3-1
(17 CFR 240.15c3-1), (3) has and maintains minimum net capital, as
defined in Rule 15c3-1, of the lesser of (i) $250,000 or (ii) $25,000
plus $5,000 for each security in excess of five with regard to which the
broker or dealer is, or is seeking to become a Qualified OTC Market
Maker, and (4) except when such activity is unlawful, meets all of the
following conditions with respect to such security: (i) He regularly
publishes bona fide, competitive bid and offer quotations in a
recognized inter-dealer quotation system, (ii) he furnishes bona fide,
competitive bid and offer quotations to other brokers and dealers on
request, (iii) he is ready, willing and able to effect transactions in
reasonable amounts, and at his quoted prices, with other brokers and
dealers, and (iv) he has a reasonable average rate of inventory turnover
in such security.
(b) The term Qualified Third Market Maker means a dealer in any
stock registered on a national securities exchange (``exchange'') who
(1) is a broker or dealer registered pursuant to section 15 of the Act,
(2) is subject to and is in compliance with Rule 15c3-1 (17 CFR
240.15c3-1), (3) has and maintains minimum net capital, as defined in
Rule 15c3-1, of the lesser of (i) $500,000 or (ii) $100,000 plus $20,000
for each security in excess of five with regard to which the broker or
dealer is, or is seeking to become, a Qualified Third Market Maker, and
(4) except when such activity is unlawful, meets all of the following
conditions with respect to such security: (i) He furnishes bona fide,
competitive bid and offer quotations at all times to other brokers and
dealers on request, (ii) he is ready, willing and able to effect
transactions for his own account in reasonable amounts, and at his
quoted prices with other brokers and dealers, and (iii) he has a
reasonable average rate of inventory turnover in such security.
(c) The term Qualified Block Positioner means a dealer who (1) is a
broker or dealer registered pursuant to section 15 of the Act, (2) is
subject to and in compliance with Rule 15c3-1 (17 CFR 240.15c3-1), (3)
has and maintains minimum net capital, as defined in Rule 15c3-1 of
$1,000,000 and (4) except when such activity is unlawful, meets all of
the following conditions: (i) He engages in the activity of purchasing
long or selling short, from time to time, from or to a customer (other
than a partner or a joint venture or other entity in which a partner,
the dealer, or a person associated with such dealer, as defined in
section 3(a) (18) of the Act, participates) a block of stock with a
current market value of $200,000 or more in a single transaction, or in
several transactions at approximately the same time, from a single
source to facilitate a sale or purchase by such customer, (ii) he has
determined in the exercise of reasonable diligence that the block could
not be sold to or purchased from others on equivalent or better terms,
and (iii) he sells the shares comprising the block as rapidly as
possible commensurate with the circumstances.
(15 U.S.C. 78a et seq., as amended by Pub. L. 94-29 (June 4, 1975),
particularly secs. 2, 3, 11, 15, 17 and 23 thereof (15 U.S.C. 78b, 78c,
78k, 78o, 78q and 78w))
[48 FR 39606, Sept. 1, 1983]
Sec. 240.3b-9 Definition of ``bank'' for purposes of section 3(a) (4)
and (5) of the Act.
(a) The term bank as used in the definition of broker and dealer in
section 3(a) (4) and (5) of the Act does not include a bank that:
(1) Publicly solicits brokerage business for which it receives
transaction-related compensation, unless the bank
[[Page 43]]
enters into a contractual or other arrangement with a broker-dealer
registered under the Act pursuant to which the broker-dealer will offer
brokerage services on or off the premises of the bank, provided that:
(i) Such broker-dealer is clearly identified as the person
performing the brokerage services;
(ii) Bank employees perform only clerical and ministerial functions
in connection with brokerage transactions unless such employees are
qualified as registered representatives pursuant to the requirements of
the self-regulatory organizations;
(iii) Bank employees do not receive, directly or indirectly,
compensation for any brokerage activities unless such employees are
qualified as registered representatives pursuant to the requirements of
the self-regulatory organizations; and
(iv) Such services are provided by the broker-dealer on a basis in
which all customers are fully disclosed.
(2) Directly or indirectly receives transaction-related compensation
for providing brokerage services for trust, managing agency or other
accounts to which the bank provides advice, provided, however, that this
subsection shall not apply if the bank executes transactions through a
registered broker-dealer and:
(i) Each account independently chooses the broker-dealer through
which execution is effected;
(ii) The bank's personnel do not receive, directly or indirectly,
transaction-related compensation or compensation based upon the number
of accounts choosing to use the registered broker-dealer; and
(iii) The brokerage services are provided by the broker-dealer on a
basis in which all customers are fully disclosed; or
(3) Deals in or underwrites securities.
(b) This rule shall not apply to any bank that engages in one or
more of the following activities only:
(1) Effects transactions in exempted or municipal securities as
defined in the Act or in commercial paper, bankers' acceptances or
commercial bills;
(2) Effects no more than 1,000 transactions each year in securities
other than exempted or municipal securities as defined in the Act or in
commercial paper, bankers' acceptances or commercial bills;
(3) Effects transactions for the investment portfolio of affiliated
companies;
(4) Effects transactions as part of a program for the investment or
reinvestment of bank deposit funds into any no-load open-end investment
company registered pursuant to the Investment Company Act of 1940 that
attempts to maintain a constant net asset value per share or has an
investment policy calling for investment of at least 80% of its assets
in debt securities maturing in thirteen months or less;
(5) Effects transactions as part of any bonus, profit-sharing,
pension, retirement, thrift, savings, incentive, stock purchase, stock
ownership, stock appreciation, stock option, dividend reinvestment or
similar plan for employees or shareholders of an issuer or its
subsidiaries;
(6) Effects transactions pursuant to sections 3(b), 4(2) and 4(6) of
the Securities Act of 1933 and the rules and regulations thereunder; or
(7) Is subject to section 15(e) of the Act.
(c) The Commission, upon written request, or upon its own motion,
may exempt a bank, either unconditionally or on specific terms and
conditions, where the Commisison determines that the bank's activities
are not within the intended meaning and purpose of this rule.
(d) For purposes of this section, the term transaction-related
compensation shall mean monetary profit to the bank in excess of cost
recovery for providing brokerage execution services.
[50 FR 28394, July 12, 1985]
Sec. 240.3b-10 [Reserved]
Sec. 240.3b-11 Definitions relating to limited partnership roll-up
transactions for purposes of sections 6(b)(9), 14(h) and 15A(b)(12)-(13).
For purposes of sections 6(b)(9), 14(h) and 15A(b)(12)-(13) of the
Act (15 U.S.C. 78f(b)(9), 78n(h) and 78o-3(b)(12)-(13)):
(a) The term limited partnership roll-up transaction does not
include a transaction involving only entities that are
[[Page 44]]
not ``finite-life'' as defined in Item 901(b)(2) of Regulation S-K
(Sec. 229.901(b)(2) of this chapter).
(b) The term limited partnership roll-up transaction does not
include a transaction involving only entities registered under the
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or any Business
Development Company as defined in section 2(a)(48) of that Act (15
U.S.C. 80a-2(a)(48)).
(c) The term regularly traded shall be defined as in Item
901(c)(2)(v)(C) of Regulation S-K (Sec. 229.901(c)(2)(v)(C) of this
chapter).
[59 FR 63684, Dec. 8, 1994]
Sec. 240.3b-12 Definition of OTC derivatives dealer.
The term OTC derivatives dealer means any dealer that is affiliated
with a registered broker or dealer (other than an OTC derivatives
dealer), and whose securities activities:
(a) Are limited to:
(1) Engaging in dealer activities in eligible OTC derivative
instruments that are securities;
(2) Issuing and reacquiring securities that are issued by the
dealer, including warrants on securities, hybrid securities, and
structured notes;
(3) Engaging in cash management securities activities;
(4) Engaging in ancillary portfolio management securities
activities; and
(5) Engaging in such other securities activities that the Commission
designates by order pursuant to Sec. 240.15a-1(b)(1); and
(b) Consist primarily of the activities described in paragraphs
(a)(1), (a)(2), and (a)(3) of this section; and
(c) Do not consist of any other securities activities, including
engaging in any transaction in any security that is not an eligible OTC
derivative instrument, except as permitted under paragraphs (a)(3),
(a)(4), and (a)(5) of this section.
(d) For purposes of this section, the term hybrid security means a
security that incorporates payment features economically similar to
options, forwards, futures, swap agreements, or collars involving
currencies, interest or other rates, commodities, securities, indices,
quantitative measures, or other financial or economic interests or
property of any kind, or any payment or delivery that is dependent on
the occurrence or nonoccurrence of any event associated with a potential
financial, economic, or commercial consequence (or any combination,
permutation, or derivative of such contract or underlying interest).
[63 FR 59394, Nov. 3, 1998]
Sec. 240.3b-13 Definition of eligible OTC derivative instrument.
(a) Except as otherwise provided in paragraph (b) of this section,
the term eligible OTC derivative instrument means any contract,
agreement, or transaction that:
(1) Provides, in whole or in part, on a firm or contingent basis,
for the purchase or sale of, or is based on the value of, or any
interest in, one or more commodities, securities, currencies, interest
or other rates, indices, quantitative measures, or other financial or
economic interests or property of any kind; or
(2) Involves any payment or delivery that is dependent on the
occurrence or nonoccurrence of any event associated with a potential
financial, economic, or commercial consequence; or
(3) Involves any combination or permutation of any contract,
agreement, or transaction or underlying interest, property, or event
described in paragraphs (a)(1) or (a)(2) of this section.
(b) The term eligible OTC derivative instrument does not include any
contract, agreement, or transaction that:
(1) Provides for the purchase or sale of a security, on a firm
basis, unless:
(i) The settlement date for such purchase or sale occurs at least
one year following the trade date or, in the case of an eligible forward
contract, at least four months following the trade date; or
(ii) The material economic features of the contract, agreement, or
transaction consist primarily of features of a type described in
paragraph (a) of this section other than the provision for the purchase
or sale of a security on a firm basis; or
(2) Provides, in whole or in part, on a firm or contingent basis,
for the purchase or sale of, or is based on the
[[Page 45]]
value of, or any interest in, any security (or group or index of
securities), and is:
(i) Listed on, or traded on or through, a national securities
exchange or registered national securities association, or facility or
market thereof; or
(ii) Except as otherwise determined by the Commission by order
pursuant to Sec. 240.15a-1(b)(2), one of a class of fungible
instruments that are standardized as to their material economic terms.
(c) The Commission may issue an order pursuant to Sec. 240.15a-
1(b)(3) clarifying whether certain contracts, agreements, or
transactions are within the scope of eligible OTC derivative instrument.
(d) For purposes of this section, the term eligible forward contract
means a forward contract that provides for the purchase or sale of a
security other than a government security, provided that, if such
contract provides for the purchase or sale of margin stock (as defined
in Regulation U of the Regulations of the Board of Governors of the
Federal Reserve System, 12 CFR Part 221), such contract either:
(1) Provides for the purchase or sale of such stock by the issuer
thereof (or an affiliate that is not a bank or a broker or dealer); or
(2) Provides for the transfer of transaction collateral in an amount
that would satisfy the requirements, if any, that would be applicable
assuming the OTC derivatives dealer party to such transaction were not
eligible for the exemption from Regulation T of the Regulations of the
Board of Governors of the Federal Reserve System, 12 CFR part 220, set
forth in Sec. 240.36a1-1.
[63 FR 59395, Nov. 3, 1998]
Sec. 240.3b-14 Definition of cash management securities activities.
The term cash management securities activities means securities
activities that are limited to transactions involving:
(a) Any taking possession of, and any subsequent sale or disposition
of, collateral provided by a counterparty, or any acquisition of, and
any subsequent sale or disposition of, collateral to be provided to a
counterparty, in connection with any securities activities of the dealer
permitted under Sec. 240.15a-1 or any non-securities activities of the
dealer that involve eligible OTC derivative instruments or other
financial instruments;
(b) Cash management, in connection with any securities activities of
the dealer permitted under Sec. 240.15a-1 or any non-securities
activities of the dealer that involve eligible OTC derivative
instruments or other financial instruments; or
(c) Financing of positions of the dealer acquired in connection with
any securities activities of the dealer permitted under Sec. 240.15a-1
or any non-securities activities that involve eligible OTC derivative
instruments or other financial instruments.
[63 FR 59395, Nov. 3, 1998]
Sec. 240.3b-15 Definition of ancillary portfolio management securities
activities.
(a) The term ancillary portfolio management securities activities
means securities activities that:
(1) Are limited to transactions in connection with:
(i) Dealer activities in eligible OTC derivative instruments;
(ii) The issuance of securities by the dealer; or
(iii) Such other securities activities that the Commission
designates by order pursuant to Sec. 240.15a-1(b)(1); and
(2) Are conducted for the purpose of reducing the market or credit
risk of the dealer or consist of incidental trading activities for
portfolio management purposes; and
(3) Are limited to risk exposures within the market, credit,
leverage, and liquidity risk parameters set forth in:
(i) The trading authorizations granted to the associated person (or
to the supervisor of such associated person) who executes a particular
transaction for, or on behalf of, the dealer; and
(ii) The written guidelines approved by the governing body of the
dealer and included in the internal risk management control system for
the dealer pursuant to Sec. 240.15c3-4; and
(4) Are conducted solely by one or more associated persons of the
dealer who perform substantial duties for, or on behalf of, the dealer
in connection
[[Page 46]]
with its dealer activities in eligible OTC derivative instruments.
(b) The Commission may issue an order pursuant to Sec. 240.15a-
1(b)(4) clarifying whether certain securities activities are within the
scope of ancillary portfolio management securities activities.
[63 FR 59395, Nov. 3, 1998]
Sec. 240.3b-16 Definitions of terms used in Section 3(a)(1) of the Act.
(a) An organization, association, or group of persons shall be
considered to constitute, maintain, or provide ``a market place or
facilities for bringing together purchasers and sellers of securities or
for otherwise performing with respect to securities the functions
commonly performed by a stock exchange,'' as those terms are used in
section 3(a)(1) of the Act, (15 U.S.C. 78c(a)(1)), if such organization,
association, or group of persons:
(1) Brings together the orders for securities of multiple buyers and
sellers; and
(2) Uses established, non-discretionary methods (whether by
providing a trading facility or by setting rules) under which such
orders interact with each other, and the buyers and sellers entering
such orders agree to the terms of a trade.
(b) An organization, association, or group of persons shall not be
considered to constitute, maintain, or provide ``a market place or
facilities for bringing together purchasers and sellers of securities or
for otherwise performing with respect to securities the functions
commonly performed by a stock exchange,'' solely because such
organization, association, or group of persons engages in one or more of
the following activities:
(1) Routes orders to a national securities exchange, a market
operated by a national securities association, or a broker-dealer for
execution; or
(2) Allows persons to enter orders for execution against the bids
and offers of a single dealer; and
(i) As an incidental part of these activities, matches orders that
are not displayed to any person other than the dealer and its employees;
or
(ii) In the course of acting as a market maker registered with a
self-regulatory organization, displays the limit orders of such market
maker's, or other broker-dealer's, customers; and
(A) Matches customer orders with such displayed limit orders; and
(B) As an incidental part of its market making activities, crosses
or matches orders that are not displayed to any person other than the
market maker and its employees.
(c) For purposes of this section the term order means any firm
indication of a willingness to buy or sell a security, as either
principal or agent, including any bid or offer quotation, market order,
limit order, or other priced order.
(d) For the purposes of this section, the terms bid and offer shall
have the same meaning as under Sec. 242.600 of this chapter.
(e) The Commission may conditionally or unconditionally exempt any
organization, association, or group of persons from the definition in
paragraph (a) of this section.
[63 FR 70918, Dec. 22, 1998, as amended at 70 FR 37617, June 29, 2005]
Sec. 240.3b-17 Definitions of terms used in Section 3(a)(4) of the Act.
For purposes of Section 3(a)(4) of the Act (15 U.S.C. 78c(a)(4)):
(a) The term chiefly compensated means that the ``relationship
compensation'' received by a bank from a trust or fiduciary account
exceeds the ``sales compensation'' received by the bank from such
account during the immediately preceding year, which is either a
calendar year or other fiscal year consistently used by the bank for
recordkeeping and reporting purposes.
(b) The term flat or capped per order processing fee equal to not
more than the cost incurred by the bank in connection with executing
securities transactions for trustee and fiduciary customers means a fee
that is no more than the amount a broker-dealer charged the bank for
executing the transaction, plus the costs of any resources of the bank
that are exclusively dedicated to transaction execution, comparison, and
settlement for trust and fiduciary customers.
(c) The term indenture trustee means any trustee for an indenture to
which the definition given in Section 303 of the Trust Indenture Act of
1939 (15
[[Page 47]]
U.S.C. 77ccc) applies, and any trustee for an indenture to which the
definition in Section 303 of the Trust Indenture Act of 1939 (15 U.S.C.
77ccc) would apply but for an exemption from qualification pursuant to
Section 304 of the Trust Indenture Act of 1939 (15 U.S.C. 77ddd).
(d) The term investment adviser if the bank receives a fee for its
investment advice means a bank that has a relationship with the customer
paying the fee in which the bank:
(1) Provides, in return for the fee, continuous and regular
investment advice to the customer's account that is based upon the
individual needs of the customer; and
(2) Under state law, federal law, contract, or customer agreement
owes a duty of loyalty, including an affirmative duty to make full and
fair disclosure to the customer of all material facts relating to
conflicts.
(e) The term money market fund means an open-end management
investment company registered under the Investment Company Act of 1940
(15 U.S.C. 80a-1 et seq.) that is regulated as a money market fund
pursuant to Sec. 270.2a-7 of this chapter.
(f)(1) The term no-load in the context of an investment company
registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et
seq.) means:
(i) Purchases of the investment company's securities are not subject
to a sales load, as that term is defined in Section 2(a)(35) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(35)), or a deferred
sales load, as that term is defined in Sec. 270.6c-10 of this chapter;
and
(ii) The investment company's total charges against net assets for
sales or sales promotion expenses and personal service or the
maintenance of shareholder accounts do not exceed 0.25 of 1% of average
net assets annually and are disclosed in the money market fund's
prospectus.
(2) For purposes of paragraph (f)(1) of this section, charges for
the following will not be considered charges for personal service or for
the maintenance of shareholder accounts:
(i) Transfer agent and subtransfer agent services for beneficial
owners of the investment company shares;
(ii) Aggregating and processing purchase and redemption orders;
(iii) Providing beneficial owners with statements showing their
positions in the investment companies;
(iv) Processing dividend payments;
(v) Providing subaccounting services for investment company shares
held beneficially;
(vi) Forwarding shareholder communications, such as proxies,
shareholder reports, dividend and tax notices, and updating prospectuses
to beneficial owners; or (vii) Receiving, tabulating, and transmitting
proxies executed by beneficial owners.
(g)(1) The term nominal one-time cash fee of a fixed dollar amount
means a payment in either of the following forms that meets the
requirements of subparagraph (2):
(i) A payment that does not exceed one hour of the gross cash wages
of the unregistered bank employee making a referral; or
(ii) Points in a system or program that covers a range of bank
products and non-securities related services where the points count
toward a bonus that is cash or non-cash if the points (and their value)
awarded for referrals involving securities are not greater than the
points (and their value) awarded for activities not involving
securities.
(2) Regardless of the form of payment, the payment may not be
related to:
(i) The size, value, or completion of any securities transaction;
(ii) The amount of securities-related assets gathered;
(iii) The size or value of any customer's bank or securities
account; or
(iv) The customer's financial status.
(h) The term referral means a bank employee arranging a first
securities-related contact between a registered broker-dealer and a bank
customer, but does not include any activity (including any part of the
account opening process) related to effecting transactions in securities
beyond arranging that first contact.
(i) The term relationship compensation means any compensation
received by a bank in connection with activities for which the bank
relies on an exception under Section 3(a)(4)(B)(ii) of the Act
[[Page 48]]
(15 U.S.C. 78c(a)(4)(B)(ii)) that is received directly from a customer
or beneficiary, or directly from the assets of the trust or fiduciary
account, and consists solely of an administration or annual fee (payable
on a monthly, quarterly, or other basis), a percentage of assets under
management fee, or a flat or capped per order processing fee equal to
not more than the cost incurred by the bank in connection with executing
securities transactions for trust and fiduciary accounts, or any
combination of such fees.
(j) The term sales compensation means any compensation received by a
bank in connection with activities for which the bank relies on an
exception under Section 3(a)(4)(B)(ii) of the Act (15 U.S.C.
78c(a)(4)(B)(ii)) that:
(1) Is a fee for effecting a transaction in securities that is not a
flat or capped per order processing fee equal to not more than the cost
incurred by the bank in connection with executing securities
transactions for trustee and fiduciary customers;
(2) Is compensation that if paid to a broker or dealer would be
payment for order flow, as defined in Sec. 240.10b-10;
(3) Is a finders' fee received in connection with a securities
transaction or account, except a fee received pursuant to Section
3(a)(4)(B)(i) of the Act (15 U.S.C. 78c(a)(4)(B)(i));
(4) Is a fee paid for an offering of securities that is not received
directly from a customer or beneficiary, or directly from the assets of
the trust or fiduciary account;
(5) Is a fee paid pursuant to a Rule 12b-1 plan under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.); or
(6) Is a fee paid by an investment company for personal service or
the maintenance of shareholder accounts, except a fee that is not part
of a Rule 12b-1 plan under the Investment Company Act of 1940 (15 U.S.C.
80a-1 et seq.) for:
(i) Transfer agent and subtransfer agent services for beneficial
owners of shares in the investment company;
(ii) Aggregating and processing purchase and redemption orders;
(iii) Providing beneficial owners with statements showing their
positions in the investment companies;
(iv) Processing dividend payments;
(v) Providing subaccounting services for shares in the investment
company held beneficially;
(vi) Forwarding shareholder communications, such as proxies,
shareholder reports, dividend and tax notices, and updating prospectuses
to beneficial owners; or
(vii) Receiving, tabulating, and transmitting proxies executed by
beneficial owners.
(k) The term trustee capacity in Section 3(a)(4)(B)(ii) of the Act
(15 U.S.C. 78c(a)(4)(B)(ii)) includes an indenture trustee or a trustee
for a tax-deferred account described in Sections 401(a), 408, and 408A
under subchapter D and in Section 457 under subchapter E of the Internal
Revenue Code of 1986 (26 U.S.C. 1 et seq.).
[66 FR 27798, May 18, 2001]
Sec. 240.3b-18 Definitions of terms used in Section 3(a)(5) of the Act.
For the purposes of section 3(a)(5)(C) of the Act (15 U.S.C.
78c(a)(5)(C):
(a) The term affiliate means any company that controls, is
controlled by, or is under common control with another company.
(b) The term consumer-related receivable means any obligation
incurred by any natural person to pay money arising out of a transaction
in which the money, property, insurance, or services (being purchased)
are primarily for personal, family, or household purposes.
(c) The term member as it relates to the term ``syndicate of banks''
means a bank that is a participant in a syndicate of banks and together
with its affiliates, other than its broker or dealer affiliates,
originates no less than 10% of the value of the obligations in a pool of
obligations used to back the securities issued through a grantor trust
or other separate entity.
(d) The term obligation means any note, draft, acceptance, loan,
lease, receivable, or other evidence of indebtedness that is not a
security issued by a person other than the bank.
(e) The term originated means:
(1) Funding an obligation at the time that the obligation is
created; or
(2) Initially approving and underwriting the obligation, or
initially
[[Page 49]]
agreeing to purchase the obligation, provided that:
(i) The obligation conforms to the underwriting standards or is
evidenced by the loan documents of the bank or its affiliates, other
than its broker or dealer affiliates; and
(ii) The bank or its affiliates, other than its broker or dealer
affiliates, fund the obligation in a timely manner, not to exceed six
months after the obligation is created.
(f) The term pool means more than one obligation or type of
obligation grouped together to provide collateral for a securities
offering.
(g) The term predominantly originated means that no less than 85% of
the value of the obligations in any pool were originated by:
(1) The bank or its affiliates, other than its broker or dealer
affiliates; or
(2) Banks that are members of a syndicate of banks and affiliates of
such banks, other than their broker or dealer affiliates, if the
obligations or pool of obligations consist of mortgage obligations or
consumer-related receivables.
(3) For this purpose, the bank and its affiliates include any
financial institution with which the bank or its affiliates have merged
but does not include the purchase of a pool of obligations or the
purchase of a line of business.
(h) The term syndicate of banks means a group of banks that acts
jointly, on a temporary basis, to issue through a grantor trust or other
separate entity, securities backed by obligations originated by each of
the individual banks or their affiliates, other than their broker or
dealer affiliates.
[68 FR 8700, Feb. 24, 2003]
Sec. 240.3b-19 Definition of ``issuer'' in section 3(a)(8) of the Act
in relation to asset-backed securities.
The following applies with respect to asset-backed securities under
the Act. Terms used in this section have the same meaning as in Item
1101 of Regulation AB (Sec. 229.1101 of this chapter).
(a) The depositor for the asset-backed securities acting solely in
its capacity as depositor to the issuing entity is the ``issuer'' for
purposes of the asset-backed securities of that issuing entity.
(b) The person acting in the capacity as the depositor specified in
paragraph (a) of this section is a different ``issuer'' from that same
person acting as a depositor for another issuing entity or for purposes
of that person's own securities.
[70 FR 1620, Jan. 7, 2005]
Registration and Exemption of Exchanges
Sec. 240.6a-1 Application for registration as a national securities
exchange or exemption from registration based on limited volume.
(a) An application for registration as a national securities
exchange, or for exemption from such registration based on limited
volume, shall be filed on Form 1 (Sec. 249.1 of this chapter), in
accordance with the instructions contained therein.
(b) Promptly after the discovery that any information filed on Form
1 was inaccurate when filed, the exchange shall file with the Commission
an amendment correcting such inaccuracy.
(c) Promptly after the discovery that any information in the
statement, any exhibit, or any amendment was inaccurate when filed, the
exchange shall file with the Commission an amendment correcting such
inaccuracy.
(d) Whenever the number of changes to be reported in an amendment,
or the number of amendments filed, are so great that the purpose of
clarity will be promoted by the filing of a new complete statement and
exhibits, an exchange may, at its election, or shall, upon request of
the Commission, file as an amendment a complete new statement together
with all exhibits which are prescribed to be filed in connection with
Form 1.
(Secs. 5, 6, 17, 48 Stat. 885, 897, as amended; 15 U.S.C. 78e, 78f, 78q)
[14 FR 7759, Dec. 29, 1949, as amended at 63 FR 70918, Dec. 22, 1998]
Sec. 240.6a-2 Amendments to application.
(a) A national securities exchange, or an exchange exempted from
such registration based on limited volume, shall file an amendment to
Form 1, (Sec. 249.1 of this chapter), which shall set forth the nature
and effective date of
[[Page 50]]
the action taken and shall provide any new information and correct any
information rendered inaccurate, on Form 1, (Sec. 249.1 of this
chapter), within 10 days after any action is taken that renders
inaccurate, or that causes to be incomplete, any of the following:
(1) Information filed on the Execution Page of Form 1, or amendment
thereto; or
(2) Information filed as part of Exhibits C, F, G, H, J, K or M, or
any amendments thereto.
(b) On or before June 30 of each year, a national securities
exchange, or an exchange exempted from such registration based on
limited volume, shall file, as an amendment to Form 1, the following:
(1) Exhibits D and I as of the end of the latest fiscal year of the
exchange; and
(2) Exhibits K, M, and N, which shall be up to date as of the latest
date practicable within 3 months of the date the amendment is filed.
(c) On or before June 30, 2001 and every 3 years thereafter, a
national securities exchange, or an exchange exempted from such
registration based on limited volume, shall file, as an amendment to
Form 1, complete Exhibits A, B, C and J. The information filed under
this paragraph (c) shall be current as of the latest practicable date,
but shall, at a minimum, be up to date within 3 months as of the date
the amendment is filed.
(d)(1) If an exchange, on an annual or more frequent basis,
publishes, or cooperates in the publication of, any of the information
required to be filed by paragraphs (b)(2) and (c) of this section, in
lieu of filing such information, an exchange may:
(i) Identify the publication in which such information is available,
the name, address, and telephone number of the person from whom such
publication may be obtained, and the price of such publication; and
(ii) Certify to the accuracy of such information as of its
publication date.
(2) If an exchange keeps the information required under paragraphs
(b)(2) and (c) of this section up to date and makes it available to the
Commission and the public upon request, in lieu of filing such
information, an exchange may certify that the information is kept up to
date and is available to the Commission and the public upon request.
(3) If the information required to be filed under paragraphs (b)(2)
and (c) of this section is available continuously on an Internet web
site controlled by an exchange, in lieu of filing such information with
the Commission, such exchange may:
(i) Indicate the location of the Internet web site where such
information may be found; and
(ii) Certify that the information available at such location is
accurate as of its date.
(e) The Commission may exempt a national securities exchange, or an
exchange exempted from such registration based on limited volume, from
filing the amendment required by this section for any affiliate or
subsidiary listed in Exhibit C of the exchange's application for
registration, as amended, that either:
(1) Is listed in Exhibit C of the application for registration or
notice of registration, as amended, of one or more other national
securities exchanges; or
(2) Was an inactive subsidiary throughout the subsidiary's latest
fiscal year. Any such exemption may be granted upon terms and conditions
the Commission deems necessary or appropriate in the public interest or
for the protection of investors, provided however, that at least one
national securities exchange shall be required to file the amendments
required by this section for an affiliate or subsidiary described in
paragraph (e)(1) of this section.
(f) A national securities exchange registered pursuant to Section
6(g)(1) of the Act (15 U.S.C. 78f(g)(1)) shall be exempt from the
requirements of this section.
[63 FR 70918, Dec. 22, 1998, as amended at 66 FR 43741, Aug. 20, 2001]
Sec. 240.6a-3 Supplemental material to be filed by exchanges.
(a)(1) A national securities exchange, or an exchange exempted from
such registration based on limited volume, shall file with the
Commission any material (including notices, circulars, bulletins, lists,
and periodicals) issued or
[[Page 51]]
made generally available to members of, or participants or subscribers
to, the exchange. Such material shall be filed with the Commission
within 10 days after issuing or making such material available to
members, participants or subscribers.
(2) If the information required to be filed under paragraph (a)(1)
of this section is available continuously on an Internet web site
controlled by an exchange, in lieu of filing such information with the
Commission, such exchange may:
(i) Indicate the location of the Internet web site where such
information may be found; and
(ii) Certify that the information available at such location is
accurate as of its date.
(b) Within 15 days after the end of each calendar month, a national
securities exchange or an exchange exempted from such registration based
on limited volume, shall file a report concerning the securities sold on
such exchange during the calendar month. Such report shall set forth:
(1) The number of shares of stock sold and the aggregate dollar
amount of such stock sold;
(2) The principal amount of bonds sold and the aggregate dollar
amount of such bonds sold; and
(3) The number of rights and warrants sold and the aggregate dollar
amount of such rights and warrants sold.
(c) A national securities exchange registered pursuant to Section
6(g)(1) of the Act (15 U.S.C. 78f(g)(1)) shall be exempt from the
requirements of this section.
[63 FR 70919, Dec. 22, 1998, as amended at 66 FR 43741, Aug. 20, 2001]
Sec. 240.6a-4 Notice of registration under Section 6(g) of the Act,
amendment to such notice, and supplemental materials to be filed by
exchanges registered under Section 6(g) of the Act.
(a) Notice of registration. (1) An exchange may register as a
national securities exchange solely for the purposes of trading security
futures products by filing Form 1-N (Sec. 249.10 of this chapter)
(``notice of registration''), in accordance with the instructions
contained therein, if:
(i) The exchange is a board of trade, as that term in defined in the
Commodity Exchange Act (7 U.S.C. 1a(2)), that:
(A) Has been designated a contract market by the Commodity Futures
Trading Commission and such designation is not suspended by order of the
Commodity Futures Trading Commission; or
(B) Is registered as a derivative transaction execution facility
under Section 5a of the Commodity Exchange Act (7 U.S.C. 7a) and such
registration is not suspended by the Commodity Futures Trading
Commission; and
(ii) Such exchange does not serve as a market place for transactions
in securities other than:
(A) Security futures products; or
(B) Futures on exempted securities or on groups or indexes of
securities or options thereon that have been authorized under Section
2(a)(1)(C) of the Commodity Exchange Act (7 U.S.C. 2a).
(2) Promptly after the discovery that any information filed on Form
1-N (Sec. 249.10 of this chapter) was inaccurate when filed, the
exchange shall file with the Commission an amendment correcting such
inaccuracy.
(b) Amendment to notice of registration. (1) A national securities
exchange registered pursuant to Section 6(g)(1) of the Act (15 U.S.C.
78f(g)(1)) (``Security Futures Product Exchange'') shall file an
amendment to Form 1-N (Sec. 249.10 of this chapter), which shall set
forth the nature and effective date of the action taken and shall
provide any new information and correct any information rendered
inaccurate, on Form 1-N (Sec. 249.10 of this chapter), within:
(i) Ten days after any action is taken that renders inaccurate, or
that causes to be incomplete, any information filed on the Execution
Page of Form 1-N (Sec. 249.10 of this chapter), or amendment thereto;
or
(ii) 30 days after any action is taken that renders inaccurate, or
that causes to be incomplete, any information filed as part of Exhibit F
to Form 1-N (Sec. 249.10 of this chapter), or any amendments thereto.
(2) A Security Futures Product Exchange shall maintain records
relating
[[Page 52]]
to changes in information required in Exhibits C and E to Form 1-N
(Sec. 249.10 of this chapter) which shall be current of as of the
latest practicable date, but shall, at a minimum, be up-to-date within
30 days. A Security Futures Product Exchange shall make such records
available to the Commission and the public upon request.
(3) On or before June 30, 2002, and by June 30 every year
thereafter, a Security Futures Product Exchange shall file, as an
amendment to Form 1-N (Sec. 249.10 of this chapter), Exhibits F, H, and
I, which shall be current of as of the latest practicable date, but
shall, at a minimum, be up-to-date within three months as of the date
the amendment is filed.
(4) On or before June 30, 2004, and by June 30 every three years
thereafter, a Security Futures Product Exchange shall file, as an
amendment to Form 1-N (Sec. 249.10 of this chapter), complete Exhibits
A, B, C, and E, which shall be current of as of the latest practicable
date, but shall, at a minimum, be up-to-date within three months as of
the date the amendment is filed.
(5)(i) If a Security Futures Product Exchange, on an annual or more
frequent basis, publishes, or cooperates in the publication of, any of
the information required to be filed by paragraphs (b)(3) and (b)(4) of
this section, in lieu of filing such information, a Security Futures
Product Exchange may satisfy this filing requirement by:
(A) Identifying the publication in which such information is
available, the name, address, and telephone number of the person from
whom such publication may be obtained, and the price of such
publication; and
(B) Certifying to the accuracy of such information as of its
publication date.
(ii) If a Security Futures Product Exchange keeps the information
required under paragraphs (b)(3) and (b)(4) of this section up-to-date
and makes it available to the Commission and the public upon request, in
lieu of filing such information, a Security Futures Product Exchange may
satisfy this filing requirement by certifying that the information is
kept up-to-date and is available to the Commission and the public upon
request.
(iii) If the information required to be filed under paragraphs
(b)(3) and (b)(4) of this section is available continuously on an
Internet web site controlled by a Security Futures Product Exchange, in
lieu of filing such information with the Commission, such Security
Futures Product Exchange may satisfy this filing requirement by:
(A) Indicating the location of the Internet web site where such
information may be found; and
(B) Certifying that the information available at such location is
accurate as of its date.
(6)(i) The Commission may exempt a Security Futures Product Exchange
from filing the amendment required by this section for any affiliate or
subsidiary listed in Exhibit C to Form 1-N (Sec. 249.10 of this
chapter), as amended, that either:
(A) Is listed in Exhibit C to Form 1 (Sec. 249.1 of this chapter)
or to Form 1-N (Sec. 249.10 of this chapter), as amended, of one or
more other national securities exchanges; or
(B) Was an inactive affiliate or subsidiary throughout the
affiliate's or subsidiary's latest fiscal year.
(ii) Any such exemption may be granted upon terms and conditions the
Commission deems necessary or appropriate in the public interest or for
the protection of investors, provided however, that at least one
national securities exchange shall be required to file the amendments
required by this section for an affiliate or subsidiary described in
paragraph (b)(6)(i) of this section.
(7) If a Security Futures Product Exchange has filed documents with
the Commodity Futures Trading Commission, to the extent that such
documents contain information satisfying the Commission's informational
requirements, copies of such documents may be filed with the Commission
in lieu of the required written notice.
(c) Supplemental material to be filed by Security Futures Product
Exchanges. (1)(i) A Security Futures Product Exchange shall file with
the Commission any material related to the trading of security futures
products (including notices, circulars, bulletins, lists, and
periodicals) issued or made generally available to members of,
participants
[[Page 53]]
in, or subscribers to, the exchange. Such material shall be filed with
the Commission within ten days after issuing or making such material
available to members, participants, or subscribers.
(ii) If the information required to be filed under paragraph
(c)(1)(i) of this section is available continuously on an Internet web
site controlled by an exchange, in lieu of filing such information with
the Commission, such exchange may:
(A) Indicate the location of the Internet web site where such
information may be found; and
(B) Certify that the information available at such location is
accurate as of its date.
(2) Within 15 days after the end of each calendar month, a Security
Futures Product Exchange shall file a report concerning the security
futures products traded on such exchange during the previous calendar
month. Such a report shall:
(i) For each contract of sale for future delivery of a single
security, the number of contracts traded on such exchange during the
relevant calendar month and the total number of shares underlying such
contracts traded; and
(ii)For each contract of sale for future delivery of a narrow-based
security index, the number of contracts traded on such exchange during
the relevant calendar month and the total number of shares represented
by the index underlying such contracts traded.
[66 FR 43741, Aug. 20, 2001]
Sec. 240.6h-1 Settlement and regulatory halt requirements for security
futures products.
(a) For the purposes of this section:
(1) Opening price means the price at which a security opened for
trading, or a price that fairly reflects the price at which a security
opened for trading, during the regular trading session of the national
securities exchange or national securities association that lists the
security. If the security is not listed on a national securities
exchange or a national securities association, then opening price shall
mean the price at which a security opened for trading, or a price that
fairly reflects the price at which a security opened for trading, on the
primary market for the security.
(2) Regular trading session of a security means the normal hours for
business of a national securities exchange or national securities
association that lists the security.
(3) Regulatory halt means a delay, halt, or suspension in the
trading of a security, that is instituted by the national securities
exchange or national securities association that lists the security, as
a result of:
(i) A determination that there are matters relating to the security
or issuer that have not been adequately disclosed to the public, or that
there are regulatory problems relating to the security which should be
clarified before trading is permitted to continue; or
(ii) The operation of circuit breaker procedures to halt or suspend
trading in all equity securities trading on that national securities
exchange or national securities association.
(b) Final settlement prices for security futures products. (1) The
final settlement price of a cash-settled security futures product must
fairly reflect the opening price of the underlying security or
securities.
(2) Notwithstanding paragraph (b)(1) of this section, if an opening
price for one or more securities underlying a security futures product
is not readily available, the final settlement price of the security
futures product shall fairly reflect:
(i) The price of the underlying security or securities during the
most recent regular trading session for such security or securities; or
(ii) The next available opening price of the underlying security or
securities.
(3) Notwithstanding paragraph (b)(1) or (b)(2) of this section, if a
clearing agency registered under Section 17A of the Act (15 U.S.C. 78q-
1), or exempt from registration pursuant to Section 17A(b)(7) of the Act
(15 U.S.C. 78q-1(b)(7)), to which the final settlement price of a
security futures product is or would be reported determines, pursuant to
its rules, that such final settlement price is not consistent with the
protection of investors and the public
[[Page 54]]
interest, taking into account such factors as fairness to buyers and
sellers of the affected security futures product, the maintenance of a
fair and orderly market in such security futures product, and
consistency of interpretation and practice, the clearing agency shall
have the authority to determine, under its rules, a final settlement
price for such security futures product.
(c) Regulatory trading halts. The rules of a national securities
exchange or national securities association registered pursuant to
Section 15A(a) of the Act (15 U.S.C. 78o-3(a)) that lists or trades one
or more security futures products must include the following provisions:
(1) Trading of a security futures product based on a single security
shall be halted at all times that a regulatory halt has been instituted
for the underlying security; and
(2) Trading of a security futures product based on a narrow-based
security index shall be halted at all times that a regulatory halt has
been instituted for one or more underlying securities that constitute 50
percent or more of the market capitalization of the narrow-based
security index.
(d) The Commission may exempt from the requirements of this section,
either unconditionally or on specified terms and conditions, any
national securities exchange or national securities association, if the
Commission determines that such exemption is necessary or appropriate in
the public interest and consistent with the protection of investors. An
exemption granted pursuant to this paragraph shall not operate as an
exemption from any Commodity Futures Trading Commission rules. Any
exemption that may be required from such rules must be obtained
separately from the Commodity Futures Trading Commission.
[67 FR 36762, May 24, 2002]
Sec. 240.7c2-1 [Reserved]
Hypothecation of Customers' Securities
Sec. 240.8c-1 Hypothecation of customers' securities.
(a) General provisions. No member of a national securities exchange,
and no broker or dealer who transacts a business in securities through
the medium of any such member shall, directly or indirectly, hypothecate
or arrange for or permit the continued hypothecation of any securities
carried for the account of any customer under circumstances:
(1) That will permit the commingling of securities carried for the
account of any such customer with securities carried for the account of
any other customer, without first obtaining the written consent of each
such customer to such hypothecation;
(2) That will permit such securities to be commingled with
securities carried for the account of any person other than a bona fide
customer of such member, broker or dealer under a lien for a loan made
to such member, broker or dealer; or
(3) That will permit securities carried for the account of customers
to be hypothecated or subjected to any lien or liens or claim or claims
of the pledges or pledgees, for a sum which exceeds the aggregate
indebtedness of all customers in respect of securities carried for their
accounts; except that this clause shall not be deemed to be violated by
reason of an excess arising on any day through the reduction of the
aggregate indebtedness of customers on such day, provided that funds or
securities in an amount sufficient to eliminate such excess are paid or
placed in transfer to pledgees for the purpose of reducing the sum of
the liens or claims to which securities carried for the account of
customers are subjected as promptly as practicable after such reduction
occurs, but before the lapse of one-half hour after the commencement of
banking hours on the next banking day at the place where the largest
principal amount of loans of such member, broker or dealer are payable
and, in any event, before such member, broker or dealer on such day has
obtained or increased any bank loan collateralized by securities carried
for the account of customers.
(b) Definitions. For the purposes of this section:
(1) The term customer shall not include any general or special
partner or any director or officer of such member, broker or dealer, or
any participant, as such, in any joint, group or syndicate
[[Page 55]]
account with such member, broker or dealer or with any partner, officer
or director thereof. The term also shall not include any counterparty
who has delivered collateral to an OTC derivatives dealer pursuant to a
transaction in an eligible OTC derivative instrument, or pursuant to the
OTC derivatives dealer's cash management securities activities or
ancillary portfolio management securities activities, and who has
received a prominent written notice from the OTC derivatives dealer
that:
(i) Except as otherwise agreed in writing by the OTC derivatives
dealer and the counterparty, the dealer may repledge or otherwise use
the collateral in its business;
(ii) In the event of the OTC derivatives dealer's failure, the
counterparty will likely be considered an unsecured creditor of the
dealer as to that collateral;
(iii) The Securities Investor Protection Act of 1970 (15 U.S.C.
78aaa through 78lll) does not protect the counterparty; and
(iv) The collateral will not be subject to the requirements of Sec.
240.8c-1, Sec. 240.15c2-1, Sec. 240.15c3-2, or Sec. 240.15c3-3;
(2) The term securities carried for the account of any customer
shall be deemed to mean:
(i) Securities received by or on behalf of such member, broker or
dealer for the account of any customer;
(ii) Securities sold and appropriated by such member, broker or
dealer to a customer, except that if such securities were subject to a
lien when appropriated to a customer they shall not be deemed to be
``securities carried for the account of any customer'' pending their
release from such lien as promptly as practicable:
(iii) Securities sold, but not appropriated, by such member, broker
or dealer to a customer who has made any payment therefor, to the extent
that such member, broker or dealer owns and has received delivery of
securities of like kind, except that if such securities were subject to
a lien when such payment was made they shall not be deemed to be
``securities carried for the account of any customer'' pending their
release from such lien as promptly as practicable:
(3) ``Aggregate indebtedness'' shall not be deemed to be reduced by
reason of uncollected items. In computing aggregate indebtedness,
related guaranteed and guarantor accounts shall be treated as a single
account and considered on a consolidated basis, and balances in accounts
carrying both long and short positions shall be adjusted by treating the
market value of the securities required to cover such short positions as
though such market value were a debit; and
(4) In computing the sum of the liens or claims to which securities
carried for the account of customers of a member, broker or dealer are
subject, any rehypothecation of such securities by another member,
broker or dealer who is subject to this section or to Sec. 240.15c2-1
shall be disregarded.
(c) Exemption for cash accounts. The provisions of paragraph (a)(1)
of this section shall not apply to any hypothecation of securities
carried for the account of a customer in a special cash account within
the meaning of 12 CFR 220.4(c): Provided, That at or before the
completion of the transaction of purchase of such securities for, or of
sale of such securities to, such customer, written notice is given or
sent to such customer disclosing that such securities are or may be
hypothecated under circumstances which will permit the commingling
thereof with securities carried for the account of other customers. The
term the completion of the transaction shall have the meaning given to
such term by Sec. 240.15c1-1(b).
(d) Exemption for clearinghouse liens. The provisions of paragraphs
(a)(2), (a)(3), and (f) of this section shall not apply to any lien or
claim of the clearing corporation, or similar department or association,
of a national securities exchange or a registered national securities
association for a loan made and to be repaid on the same calendar day,
which is incidental to the clearing of transactions in securities or
loans through such corporation, department, or association: Provided,
however, That for the purpose of paragraph (a)(3) of this section,
``aggregate indebtedness of all customers in respect of securities
carried for their accounts'' shall not include indebtedness in respect
of any
[[Page 56]]
securities subject to any lien or claim exempted by this paragraph.
(e) Exemption for certain liens on securities of noncustomers. The
provisions of paragraph (a)(2) of this section shall not be deemed to
prevent such member, broker or dealer from permitting securities not
carried for the account of a customer to be subjected (1) to a lien for
a loan made against securities carried for the account of customers, or
(2) to a lien for a loan made and to be repaid on the same calendar day.
For the purpose of this exemption, a loan shall be deemed to be ``made
against securities carried for the account of customers'' if only
securities carried for the account of customers are used to obtain or to
increase such loan or as substitutes for other securities carried for
the account of customers.
(f) Notice and certification requirements. No person subject to this
section shall hypothecate any security carried for the account of a
customer unless at or prior to the time of each such hypothecation, he
gives written notice to the pledgee that the security pledged is carried
for the account of a customer and that such hypothecation does not
contravene any provision of this section, except that in the case of an
omnibus account the members, broker or dealer for whom such account is
carried may furnish a signed statement to the person carrying such
account that all securities carried therein by such member, broker or
dealer will be securities carried for the account of his customers and
that the hypothecation thereof by such member, broker or dealer will not
contravene any provision of this section. The provisions of this
paragraph shall not apply to any hypothecation of securities under any
lien or claim of a pledgee securing a loan made and to be repaid on the
same calendar day.
(g) The fact that securities carried for the accounts of customers
and securities carried for the accounts of others are represented by one
or more certificates in the custody of a clearing corporation or other
subsidiary organization of either a national securities exchange or of a
registered national securities association, or of a custodian bank, in
accordance with a system for the central handling of securities
established by a national securities exchange or a registered national
securities association, pursuant to which system the hypothecation of
such securities is effected by bookkeeping entries without physical
delivery of such securities, shall not, in and of itself, result in a
commingling of securities prohibited by paragraph (a)(1) or (a)(2) of
this section, whenever a participating member, broker or dealer
hypothecates securities in accordance with such system: Provided,
however, That (1) any such custodian of any securities held by or for
such system shall agree that it will not for any reason, including the
assertion of any claim, right or lien of any kind, refuse to refrain
from promptly delivering any such securities (other than securities then
hypothecated in accordance with such system) to such clearing
corporation or other subsidiary organization or as directed by it,
except that nothing in such agreement shall be deemed to require the
custodian to deliver any securities in contravention of any notice of
levy, seizure or similar notice, or order or judgment, issued or
directed by a governmental agency or court, or officer thereof, having
jurisdiction over such custodian, which on its face affects such
securities; (2) such systems shall have safeguards in the handling,
transfer and delivery of securities and provisions for fidelity bond
coverage of the employees and agents of the clearing corporation or
other subsidiary organization and for periodic examinations by
independent public accountants; and (3) the provisions of this paragraph
shall not be effective with respect to any particular system unless the
agreement required by paragraph (g)(1) of this section and the
safeguards and provisions required by paragraph (g)(2) of this section
shall have been deemed adequate by the Commission for the protection of
investors, and unless any subsequent amendments to such agreement,
safeguards or provisions shall have been deemed adequate by the
Commission for the protection of investors.
(Secs. 3, 8, 15, 48 Stat. 882, 888, 895; 15 U.S.C. 78c, 78h, 78o)
Cross Reference: For interpretative releases applicable to Sec.
240.8c-1, see Nos. 2690
[[Page 57]]
and 2822 in tabulation, part 241 of this chapter.
[13 FR 8180, Dec. 22, 1948, as amended at 31 FR 7740, June 1, 1966; 37
FR 73, Jan. 5, 1973; 63 FR 59395, Nov. 3, 1998]
Sec. 240.9b-1 Options disclosure document.
(a) Definitions. The following definitions shall apply for the
purpose of this rule.
(1) Options market means a national securities exchange, an
automated quotation system of a registered securities association or a
foreign securities exchange on which standardized options are traded.
(2) Options class means all options contracts covering the same
underlying instrument.
(3) Options disclosure document means a document, including all
amendments and supplements thereto, prepared by one or more options
markets which has been filed with the Commission or distributed in
accordance with paragraph (b) of this section. Definitive options
disclosure document or document means an options disclosure document
furnished to customers in accordance with paragraph (b) of this section.
(4) Standardized options are options contracts trading on a national
securities exchange, an automated quotation system of a registered
securities association, or a foreign securities exchange which relate to
options classes the terms of which are limited to specific expiration
dates and exercise prices, or such other securities as the Commission
may, by order, designate.
(b)(1) Five preliminary copies of an options disclosure document
containing the information specified in paragraph (c) of this section
shall be filed with the Commission by an options market at least 60 days
prior to the date definitive copies are furnished to customers, unless
the commission determines otherwise having due regard to the adequacy of
the information disclosed and the public interest and protection of
investors. Five copies of the definitive options disclosure document
shall be filed with the Commission not later than the date the options
disclosure document is furnished to customers. Notwithstanding the
above, the use of an options disclosure document shall not be permitted
unless the options class to which such document relates is the subject
of an effective registration statement on Form S-20 under the Securities
Act of 1933, or is exempt from registration under the Securities Act of
1933 (15 U.S.C. 77a et seq.).
(2)(i) If the information contained in the options disclosure
document becomes or will become materially inaccurate or incomplete or
there is or will be an omission of material information necessary to
make the options disclosure document not misleading, the options market
shall amend or supplement its options disclosure document by filing five
copies of an amendment or supplement to such options disclosure document
with the Commission at least 30 days prior to the date definitive copies
are furnished to customers, unless the Commission determines otherwise
having due regard to the adequacy of the information disclosed and the
public interest and protection of investors. Five copies of the
definitive options disclosure document, as amended or supplemented,
shall be filed with the Commission not later than the date the amendment
or supplement, or the amended options disclosure document, is furnished
to customers.
(ii) Notwithstanding paragraph (b)(2)(i) of this section, an options
market may distribute an amendment or supplement to an options
disclosure document prior to such 30 day period if it determines, in
good faith, that such delivery is necessary to ensure timely and
accurate disclosure with respect to one or more of the options classes
covered by the document. Five copies of any amendment or supplement
distributed pursuant to this paragraph shall be filed with the
Commission at the time of distribution. In that instance, if the
Commission determines, having given due regard to the adequacy of the
information disclosed and the public interest and the protection of
investors, it may require refiling of the amendment pursuant to
paragraph (b)(2)(i) of this section.
(c) Information required in an options disclosure document. An
options disclosure document shall contain the following information,
unless otherwise
[[Page 58]]
provided by the Commission, with respect to the options classes covered
by the document:
(1) A glossary of terms;
(2) A discussion of the mechanics of exercising the options;
(3) A discussion of the risks of being a holder or writer of the
options;
(4) The identification of the market or markets in which the options
are traded;
(5) A brief reference to the transaction costs, margin requirements
and tax consequences of options trading;
(6) The identification of the issuer of the options;
(7) A general identification of the type of instrument or
instruments underlying the options class or classes covered by the
document;
(8) If the options are not exempt from registration under the
Securities Act of 1933 (15 U.S.C. 77a et seq.), the registration of the
options on form S-20 (17 CFR 239.20) and the availability of the
prospectus and the information in part II of the registration statement;
and
(9) Such other information as the Commission may specify.
(d) Broker-dealer obligations. (1) No broker or dealer shall accept
an order from a customer to purchase or sell an option contract relating
to an options class that is the subject of a definitive options
disclosure document, or approve the customer's account for the trading
of such option, unless the broker or dealer furnishes or has furnished
to the customer a copy of the definitive options disclosure document.
(2) If a definitive options disclosure document relating to an
options class is amended or supplemented, each broker and dealer shall
promptly send a copy of the definitive amendment or supplement or a copy
of the definitive options disclosure document as amended to each
customer whose account is approved for trading the options class or
classes to which the amendment or supplement relates.
[47 FR 41956, Sept. 23, 1982, as amended at 51 FR 14982, Apr. 22, 1986;
65 FR 64139, Oct. 26, 2000; 68 FR 192, Jan. 2, 2003]
Short Sales
Sec. 240.10a-1 Short sales.
(a)(1)(i) No person shall, for his own account or for the account of
any other person, effect a short sale of any security registered on, or
admitted to unlisted trading privileges on, a national securities
exchange, if trades in such securities are reported pursuant to an
``effective transaction reporting plan'' as defined in Sec. 242.600 of
this chapter and information as to such trades is made available in
accordance with such plan on a real-time basis to vendors of market
transaction information:
(A) Below the price at which the last sale thereof, regular way, was
reported pursuant to an effective transaction reporting plan; or
(B) At such price unless such price is above the next proceeding
different price at which a sale of such security, regular way, was
reported pursuant to an effective transaction reporting plan.
(ii) The provisions of paragraph (a)(1)(i) of this section hereof
shall not apply to transactions by any person in Nasdaq securities as
defined in Sec. 242.600 of this chapter, except for those Nasdaq
securities for which transaction reports are collected, processed, and
made available pursuant to the plan originally submitted to the
Commission pursuant to Sec. 240.17a-15 (subsequently amended and
redesignated as Sec. 240.11Aa3-1 and subsequently redesignated as Sec.
242.601 of this chapter), which plan was declared effective as of May
17, 1974.
(2) Notwithstanding paragraph (a)(1) of this section, any exchange,
by rule, may require that no person shall, for his own account or the
account of any other person, effect a short sale of any such security on
that exchange (i) below the price at which the last sale thereof,
regular way, was effected on such exchange, or (ii) at such price unless
such price is above the next preceding different price at which a sale
of such securities, regular way, was effected on such exchange, if that
exchange determines that such action is necessary or appropriate in its
market in the public interest or for the protection of investors; and,
if an exchange adopts such a rule, no person shall, for
[[Page 59]]
his own account or for the account of any other person, effect a short
sale of any such security on such exchange otherwise than in accordance
with such rule, and compliance with any such rule of an exchange shall
constitute compliance with this paragraph (a).
(3) In determining the price at which a short sale may be effected
after a security goes ex-dividend, ex-right, or ex-any other
distribution, all sale prices prior to the ``ex'' date may be reduced by
the value of such distribution.
(b) No person shall, for his own account or for the account of any
other person, effect on a national securities exchange a short sale of
any security not covered by paragraph (a) of this rule, (1) below the
price at which the last sale thereof, regular way, was effected on such
exchange, or (2) at such price unless such price is above the next
preceding different price at which a sale of such security, regular way,
was effected on such exchange. In determining the price at which a short
sale may be effected after a security goes ex-dividend, ex-right, or ex-
any other distribution, all sale prices prior to the ``ex'' date may be
reduced by the value of such distribution.
(c)--(d) [Reserved]
(e) The provisions of paragraphs (a) and (b) of this section (and of
any exchange rule adopted in accordance with paragraph (a) of this
section) shall not apply to:
(1) Any sale by any person, for an account in which he has an
interest, if such person owns the security sold and intends to deliver
such security as soon as is possible without undue inconvenience or
expense;
(2) Any broker or dealer in respect of a sale, for an account in
which he has no interest, pursuant to an order to sell which is marked
``long'';
(3) Any sale by an odd-lot dealer or an exchange with which it is
registered for such security, or any over-the-counter sale by a third
market maker to offset odd-lot orders of customers;
(4) Any sale by an odd-lot dealer on an exchange with which it is
registered for such security, or any over-the-counter sale by a third
market maker to liquidate a long position which is less than a round
lot, provided such sale does not change the position of such odd-lot
dealer or such market maker by more than the unit of trading;
(5) Any sale of a security covered by paragraph (a) of this section
(except a sale to a stabilizing bid complying with Sec. 242.104 of this
chapter) by a registered specialist or registered exchange market maker
for its own account on any exchange with which it is registered for such
security, or by a third market maker for its own account over-the-
counter,
(i) Effected at a price equal to or above the last sale, regular
way, reported for such security pursuant to an effective transaction
reporting plan; or
(ii) Effected at a price equal to the most recent offer communicated
for the security by such registered specialist, registered exchange
market maker or third market maker to an exchange or a national
securities association (``association'') pursuant to Sec. 242.602 of
this chapter, if such offer, when communicated, was equal to or above
the last sale, regular way, reported for such security pursuant to an
effective transaction reporting plan:
Provided, however, That any exchange, by rule, may prohibit its
registered specialist and registered exchange market makers from
availing themselves of the exemption afforded by this paragraph (e)(5)
if that exchange determines that such action is necessary or appropriate
in its market in the public interest or for the protection of investors;
(6) Any sale of a security covered by paragraph (b) of this section
on a national securities exchange (except a sale to a stabilizing bid
complying with Sec. 242.104 of this chapter) effected with the approval
of such exchange which is necessary to equalize the price of such
security thereon with the current price of such security on another
national securities exchange which is the principal exchange market for
such security;
(7) Any sale of a security for a special arbitrage acccount by a
person who then owns another security by virtue of which he is, or
presently will be, entitled to acquire an equivalent number of
securities of the same class as the securities sold; provided such sale,
or the
[[Page 60]]
purchase with such sale offsets, is effected for the bona fide purpose
of profitting from a current difference between the price of security
sold and the security owned and that such right of acquisition was
originally attached to or represented by another security or was issued
to all the holders of any such class of securities of the issuer.
(8) Any sale of a security registered on, or admitted to unlisted
trading privileges on, a national securities exchange effected for a
special international arbitrage account for the bona fide purpose of
profitting from a current difference between the price of such security
on a securities market not within or subject to the jurisdiction of the
United States and on a securities market subject to the jurisdiction of
the United States; provided the seller at the time of such sale knows
or, by virtue of information currently received, has reasonable grounds
to believe that an offer enabling him to cover such sale is then
available to him such foreign securities market and intends to accept
such offer immediately;
(9) [Reserved]
(10) Any sale by an underwriter, or any member of a syndicate or
group participating in the distribution of a security, in connection
with an over-allotment of securities, or any lay-off sale by such a
person in connection with a distribution of securities through rights or
a standby underwriting commitment; or
(11) Any sale of a security covered by paragraph (a) of this section
(except a sale to a stabilizing bid complying with Sec. 242.104 of this
chapter) by any broker or dealer, for his own account or for the account
of any other person, effected at a price equal to the most recent offer
communicated by such broker or dealer to an exchange or association
pursuant to Sec. 242.602 of this chapter in an amount less than or
equal to the quotation size associated with such offer, if such offer,
when communicated, was:
(i) Above the price at which the last sale, regular way, for such
security was reported pursuant to an effective transaction reporting
plan; or
(ii) At such last sale price, if such last sale price is above the
next preceding different price at which a sale of such security, regular
way, was reported pursuant to an effective transaction reporting plan.
(12) For the purposes of paragraph (e)(8) of this section, a
depositary receipt of a security shall be deemed to be the same security
as the security represented by such receipt. For the purposes of
paragraphs (e)(3), (4) and (5) of this section, the term ``third market
maker'' shall mean any broker or dealer who holds itself out as being
willing to buy and sell a reported security for its own account on a
regular and continuous basis otherwise than on an exchange in amounts of
less than block size.
(f) This rule shall not prohibit any transaction or transactions
which the Commission, upon written request or upon its own motion,
exempts, either unconditionally or on specified terms and conditions.
Cross References: For interpretative release applicable to Sec.
240.10a-1, see No. 1571 in tabulation, part 241 of this chapter; for
definition of ``short sale'', see Sec. 240.3b-3.
[40 FR 25444, June 16, 1975, as amended at 45 FR 12390, Feb. 26, 1980;
45 FR 79021, Nov. 28, 1981; 46 FR 49114, Oct. 8, 1981; 49 FR 9415, Mar.
13, 1984; 51 FR 8804, Mar. 14, 1986; 52 FR 24152, June 29, 1987; 58 FR
18146, Apr. 8, 1993: 62 FR 543, Jan. 3, 1997; 69 FR 48029, Aug. 6, 2004;
70 FR 37617, June 29, 2005]
Sec. 240.10a-2 [Reserved]
Manipulative and Deceptive Devices and Contrivances
Sec. 240.10b-1 Prohibition of use of manipulative or deceptive devices
or contrivances with respect to certain securities exempted from registration.
The term manipulative or deceptive device or contrivance, as used in
section 10(b) (48 Stat. 891; 15 U.S.C. 78j(b)), is hereby defined to
include any act or omission to act with respect to any security exempted
from the operation of section 12(a) (48 Stat. 892; 15 U.S.C. 78l(a))
pursuant to any section in this part which specifically provides that
this section shall be applicable to such security if such act or
omission to act would have been unlawful under section 9(a) (48 Stat.
889; 15 U.S.C. 78i(a)), or any rule or regulation heretofore or
hereafter prescribed thereunder, if
[[Page 61]]
done or omitted to be done with respect to a security registered on a
national securities exchange, and the use of any means or
instrumentality of interstate commerce or of the mails or of any
facility of any national securities exchange to use or employ any such
device or contrivance in connection with the purchase or sale of any
such security is hereby prohibited.
(Secs. 10, 12, 48 Stat. 891, 892; 15 U.S.C. 78j, 78l)
Cross References: For applicability of this section, see Sec. Sec.
240.12a-4 and 240.12a-5. For regulations relating to employment of
manipulative and deceptive devices, see Sec. Sec. 240.10b-3 and
240.10b-5.
[13 FR 8183, Dec. 22, 1948]
Sec. 240.10b-2 [Reserved]
Sec. 240.10b-3 Employment of manipulative and deceptive devices by
brokers or dealers.
(a) It shall be unlawful for any broker or dealer, directly or
indirectly, by the use of any means or instrumentality of interstate
commerce, or of the mails, or of any facility of any national securities
exchange, to use or employ, in connection with the purchase or sale of
any security otherwise than on a national securities exchange, any act,
practice, or course of business defined by the Commission to be included
within the term ``manipulative, deceptive, or other fraudulent device or
contrivance'', as such term is used in section 15(c)(1) of the act.
(b) It shall be unlawful for any municipal securities dealer
directly or indirectly, by the use of any means or instrumentality of
interstate commerce, or of the mails, or of any facility of any national
securities exchange, to use or employ, in connection with the purchase
or sale of any municipal security, any act, practice, or course of
business defined by the Commission to be included within the term
``manipulative, deceptive, or other fraudulent device or contrivance,''
as such term is used in section 15(c)(1) of the act.
(Secs. 10, 12, 48 Stat. 891, 892, as amended; 15 U.S.C. 78j, 78l)
Cross References: See also Sec. 240.10b-5. For regulation relating
to prohibition of manipulative or deceptive devices, see Sec. 240.10b-
1. For the term ``manipulative, deceptive, or other fraudulent device or
contrivance'', as used in section 15(c)(1) of the act, see Sec. Sec.
240.15c1-2 to 240.15c1-9.
[13 FR 8183, Dec. 22, 1948, as amended at 19 FR 8017, Dec. 4, 1954; 41
FR 22824, June 7, 1976]
Sec. 240.10b-4 [Reserved]
Sec. 240.10b-5 Employment of manipulative and deceptive devices.
It shall be unlawful for any person, directly or indirectly, by the
use of any means or instrumentality of interstate commerce, or of the
mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to
state a material fact necessary in order to make the statements made, in
the light of the circumstances under which they were made, not
misleading, or
(c) To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.
(Sec. 10; 48 Stat. 891; 15 U.S.C. 78j)
[13 FR 8183, Dec. 22, 1948, as amended at 16 FR 7928, Aug. 11, 1951]
Sec. 240.10b5-1 Trading ``on the basis of'' material nonpublic
information in insider trading cases.
Preliminary Note to Sec. 240.10b5-1: This provision defines when a
purchase or sale constitutes trading ``on the basis of'' material
nonpublic information in insider trading cases brought under Section
10(b) of the Act and Rule 10b-5 thereunder. The law of insider trading
is otherwise defined by judicial opinions construing Rule 10b-5, and
Rule 10b5-1 does not modify the scope of insider trading law in any
other respect.
(a) General. The ``manipulative and deceptive devices'' prohibited
by Section 10(b) of the Act (15 U.S.C. 78j) and Sec. 240.10b-5
thereunder include, among other things, the purchase or sale of a
security of any issuer, on the basis of material nonpublic information
about that security or issuer, in breach of a duty of trust or
confidence that is owed directly, indirectly, or derivatively, to the
issuer of that security or the shareholders of that issuer, or to any
other
[[Page 62]]
person who is the source of the material nonpublic information.
(b) Definition of ``on the basis of.'' Subject to the affirmative
defenses in paragraph (c) of this section, a purchase or sale of a
security of an issuer is ``on the basis of'' material nonpublic
information about that security or issuer if the person making the
purchase or sale was aware of the material nonpublic information when
the person made the purchase or sale.
(c) Affirmative defenses. (1)(i) Subject to paragraph (c)(1)(ii) of
this section, a person's purchase or sale is not ``on the basis of''
material nonpublic information if the person making the purchase or sale
demonstrates that:
(A) Before becoming aware of the information, the person had:
(1) Entered into a binding contract to purchase or sell the
security,
(2) Instructed another person to purchase or sell the security for
the instructing person's account, or
(3) Adopted a written plan for trading securities;
(B) The contract, instruction, or plan described in paragraph
(c)(1)(i)(A) of this Section:
(1) Specified the amount of securities to be purchased or sold and
the price at which and the date on which the securities were to be
purchased or sold;
(2) Included a written formula or algorithm, or computer program,
for determining the amount of securities to be purchased or sold and the
price at which and the date on which the securities were to be purchased
or sold; or
(3) Did not permit the person to exercise any subsequent influence
over how, when, or whether to effect purchases or sales; provided, in
addition, that any other person who, pursuant to the contract,
instruction, or plan, did exercise such influence must not have been
aware of the material nonpublic information when doing so; and
(C) The purchase or sale that occurred was pursuant to the contract,
instruction, or plan. A purchase or sale is not ``pursuant to a
contract, instruction, or plan'' if, among other things, the person who
entered into the contract, instruction, or plan altered or deviated from
the contract, instruction, or plan to purchase or sell securities
(whether by changing the amount, price, or timing of the purchase or
sale), or entered into or altered a corresponding or hedging transaction
or position with respect to those securities.
(ii) Paragraph (c)(1)(i) of this section is applicable only when the
contract, instruction, or plan to purchase or sell securities was given
or entered into in good faith and not as part of a plan or scheme to
evade the prohibitions of this section.
(iii) This paragraph (c)(1)(iii) defines certain terms as used in
paragraph (c) of this Section.
(A) Amount. ``Amount'' means either a specified number of shares or
other securities or a specified dollar value of securities.
(B) Price. ``Price'' means the market price on a particular date or
a limit price, or a particular dollar price.
(C) Date. ``Date'' means, in the case of a market order, the
specific day of the year on which the order is to be executed (or as
soon thereafter as is practicable under ordinary principles of best
execution). ``Date'' means, in the case of a limit order, a day of the
year on which the limit order is in force.
(2) A person other than a natural person also may demonstrate that a
purchase or sale of securities is not ``on the basis of'' material
nonpublic information if the person demonstrates that:
(i) The individual making the investment decision on behalf of the
person to purchase or sell the securities was not aware of the
information; and
(ii) The person had implemented reasonable policies and procedures,
taking into consideration the nature of the person's business, to ensure
that individuals making investment decisions would not violate the laws
prohibiting trading on the basis of material nonpublic information.
These policies and procedures may include those that restrict any
purchase, sale, and causing any purchase or sale of any security as to
which the person has material nonpublic information, or those that
prevent such individuals from becoming aware of such information.
[65 FR 51737, Aug. 24, 2000]
[[Page 63]]
Sec. 240.10b5-2 Duties of trust or confidence in misappropriation
insider trading cases.
Preliminary Note to Sec. 240.10b5-2:
This section provides a non-exclusive definition of circumstances in
which a person has a duty of trust or confidence for purposes of the
``misappropriation'' theory of insider trading under Section 10(b) of
the Act and Rule 10b-5. The law of insider trading is otherwise defined
by judicial opinions construing Rule 10b-5, and Rule 10b5-2 does not
modify the scope of insider trading law in any other respect.
(a) Scope of Rule. This section shall apply to any violation of
Section 10(b) of the Act (15 U.S.C. 78j(b)) and Sec. 240.10b-5
thereunder that is based on the purchase or sale of securities on the
basis of, or the communication of, material nonpublic information
misappropriated in breach of a duty of trust or confidence.
(b) Enumerated ``duties of trust or confidence.'' For purposes of
this section, a ``duty of trust or confidence'' exists in the following
circumstances, among others:
(1) Whenever a person agrees to maintain information in confidence;
(2) Whenever the person communicating the material nonpublic
information and the person to whom it is communicated have a history,
pattern, or practice of sharing confidences, such that the recipient of
the information knows or reasonably should know that the person
communicating the material nonpublic information expects that the
recipient will maintain its confidentiality; or
(3) Whenever a person receives or obtains material nonpublic
information from his or her spouse, parent, child, or sibling; provided,
however, that the person receiving or obtaining the information may
demonstrate that no duty of trust or confidence existed with respect to
the information, by establishing that he or she neither knew nor
reasonably should have known that the person who was the source of the
information expected that the person would keep the information
confidential, because of the parties' history, pattern, or practice of
sharing and maintaining confidences, and because there was no agreement
or understanding to maintain the confidentiality of the information.
[65 FR 51738, Aug. 24, 2000]
Sec. Sec. 240.10b-6--240.10b-8 [Reserved]
Sec. 240.10b-9 Prohibited representations in connection with certain
offerings.
(a) It shall constitute a manipulative or deception device or
contrivance, as used in section 10(b) of the Act, for any person,
directly or indirectly, in connection with the offer or sale of any
security, to make any representation:
(1) To the effect that the security is being offered or sold on an
``all-or-none'' basis, unless the security is part of an offering or
distribution being made on the condition that all or a specified amount
of the consideration paid for such security will be promptly refunded to
the purchaser unless (i) all of the securities being offered are sold at
a specified price within a specified time, and (ii) the total amount due
to the seller is received by him by a specified date; or
(2) To the effect that the security is being offered or sold on any
other basis whereby all or part of the consideration paid for any such
security will be refunded to the purchaser if all or some of the
securities are not sold, unless the security is part of an offering or
distribution being made on the condition that all or a specified part of
the consideration paid for such security will be promptly refunded to
the purchaser unless (i) a specified number of units of the security are
sold at a specified price within a specified time, and (ii) the total
amount due to the seller is received by him by a specified date.
(b) This rule shall not apply to any offer or sale of securities as
to which the seller has a firm commitment from underwriters or others
(subject only to customary conditions precedent, including ``market
outs'') for the purchase of all the securities being offered.
(Sec. 10, 48 Stat. 891, as amended; 15 U.S.C. 78j)
[27 FR 9943, Oct. 10, 1962]
[[Page 64]]
Sec. 240.10b-10 Confirmation of transactions.
Preliminary Note. This section requires broker-dealers to disclose
specified information in writing to customers at or before completion of
a transaction. The requirements under this section that particular
information be disclosed is not determinative of a broker-dealer's
obligation under the general antifraud provisions of the federal
securities laws to disclose additional information to a customer at the
time of the customer's investment decision.
(a) Disclosure requirement. It shall be unlawful for any broker or
dealer to effect for or with an account of a customer any transaction
in, or to induce the purchase or sale by such customer of, any security
(other than U.S. Savings Bonds or municipal securities) unless such
broker or dealer, at or before completion of such transaction, gives or
sends to such customer written notification disclosing:
(1) The date and time of the transaction (or the fact that the time
of the transaction will be furnished upon written request to such
customer) and the identity, price, and number of shares or units (or
principal amount) of such security purchased or sold by such customer;
and
(2) Whether the broker or dealer is acting as agent for such
customer, as agent for some other person, as agent for both such
customer and some other person, or as principal for its own account; and
if the broker or dealer is acting as principal, whether it is a market
maker in the security (other than by reason of acting as a block
positioner); and
(i) If the broker or dealer is acting as agent for such customer,
for some other person, or for both such customer and some other person:
(A) The name of the person from whom the security was purchased, or
to whom it was sold, for such customer or the fact that the information
will be furnished upon written request of such customer; and
(B) The amount of any remuneration received or to be received by the
broker from such customer in connection with the transaction unless
remuneration paid by such customer is determined pursuant to written
agreement with such customer, otherwise than on a transaction basis; and
(C) For a transaction in any NMS stock as defined in Sec. 242.600
of this chapter or a security authorized for quotation on an automated
interdealer quotation system that has the characteristics set forth in
section 17B of the Act (15 U.S.C. 78q-2), a statement whether payment
for order flow is received by the broker or dealer for transactions in
such securities and the fact that the source and nature of the
compensation received in connection with the particular transaction will
be furnished upon written request of the customer; provided, however,
that brokers or dealers that do not receive payment for order flow in
connection with any transaction have no disclosure obligations under
this paragraph; and
(D) The source and amount of any other remuneration received or to
be received by the broker in connection with the transaction: Provided,
however, that if, in the case of a purchase, the broker was not
participating in a distribution, or in the case of a sale, was not
participating in a tender offer, the written notification may state
whether any other remuneration has been or will be received and the fact
that the source and amount of such other remuneration will be furnished
upon written request of such customer; or
(ii) If the broker or dealer is acting as principal for its own
account:
(A) In the case where such broker or dealer is not a market maker in
an equity security and, if, after having received an order to buy from a
customer, the broker or dealer purchased the equity security from
another person to offset a contemporaneous sale to such customer or,
after having received an order to sell from a customer, the broker or
dealer sold the security to another person to offset a contemporaneous
purchase from such customer, the difference between the price to the
customer and the dealer's contemporaneous purchase (for customer
purchases) or sale price (for customer sales); or
(B) In the case of any other transaction in an NMS stock as defined
by
[[Page 65]]
Sec. 242.600 of this chapter, or an equity security that is traded on a
national securities exchange and that is subject to last sale reporting,
the reported trade price, the price to the customer in the transaction,
and the difference, if any, between the reported trade price and the
price to the customer.
(3) Whether any odd-lot differential or equivalent fee has been paid
by such customer in connection with the execution of an order for an
odd-lot number of shares or units (or principal amount) of a security
and the fact that the amount of any such differential or fee will be
furnished upon oral or written request: Provided, however, that such
disclosure need not be made if the differential or fee is included in
the remuneration disclosure, or exempted from disclosure, pursuant to
paragraph (a)(2)(i)(B) of this section; and
(4) In the case of any transaction in a debt security subject to
redemption before maturity, a statement to the effect that such debt
security may be redeemed in whole or in part before maturity, that such
a redemption could affect the yield represented and the fact that
additional information is available upon request; and
(5) In the case of a transaction in a debt security effected
exclusively on the basis of a dollar price:
(i) The dollar price at which the transaction was effected, and
(ii) The yield to maturity calculated from the dollar price:
Provided, however, that this paragraph (a)(5)(ii) shall not apply to a
transaction in a debt security that either:
(A) Has a maturity date that may be extended by the issuer thereof,
with a variable interest payable thereon; or
(B) Is an asset-backed security, that represents an interest in or
is secured by a pool of receivables or other financial assets that are
subject continuously to prepayment; and
(6) In the case of a transaction in a debt security effected on the
basis of yield:
(i) The yield at which the transaction was effected, including the
percentage amount and its characterization (e.g., current yield, yield
to maturity, or yield to call) and if effected at yield to call, the
type of call, the call date and call price; and
(ii) The dollar price calculated from the yield at which the
transaction was effected; and
(iii) If effected on a basis other than yield to maturity and the
yield to maturity is lower than the represented yield, the yield to
maturity as well as the represented yield; Provided, however, that this
paragraph (a)(6)(iii) shall not apply to a transaction in a debt
security that either:
(A) Has a maturity date that may be extended by the issuer thereof,
with a variable interest rate payable thereon; or
(B) Is an asset-backed security, that represents an interest in or
is secured by a pool of receivables or other financial assets that are
subject continuously to prepayment; and
(7) In the case of a transaction in a debt security that is an
asset-backed security, which represents an interest in or is secured by
a pool of receivables or other financial assets that are subject
continuously to prepayment, a statement indicating that the actual yield
of such asset-backed security may vary according to the rate at which
the underlying receivables or other financial assets are prepaid and a
statement of the fact that information concerning the factors that
affect yield (including at a minimum estimated yield, weighted average
life, and the prepayment assumptions underlying yield) will be furnished
upon written request of such customer; and
(8) In the case of a transaction in a debt security, other than a
government security, that the security is unrated by a nationally
recognized statistical rating organization, if such is the case; and
(9) That the broker or dealer is not a member of the Securities
Investor Protection Corporation (SIPC), or that the broker or dealer
clearing or carrying the customer account is not a member of SIPC, if
such is the case: Provided, however, that this paragraph (a)(9) shall
not apply in the case of a transaction in shares of a registered open-
end investment company or unit investment trust if:
(i) The customer sends funds or securities directly to, or receives
funds or securities directly from, the registered open-end investment
company or unit
[[Page 66]]
investment trust, its transfer agent, its custodian, or other designated
agent, and such person is not an associated person of the broker or
dealer required by paragraph (a) of this section to send written
notification to the customer; and
(ii) The written notification required by paragraph (a) of this
section is sent on behalf of the broker or dealer to the customer by a
person described in paragraph (a)(9)(i) of this section.
(b) Alternative periodic reporting. A broker or dealer may effect
transactions for or with the account of a customer without giving or
sending to such customer the written notification described in paragraph
(a) of this section if:
(1) Such transactions are effected pursuant to a periodic plan or an
investment company plan, or effected in shares of any open-end
management investment company registered under the Investment Company
Act of 1940 that holds itself out as a money market fund and attempts to
maintain a stable net asset value per share: Provided, however, that no
sales load is deducted upon the purchase or redemption of shares in the
money market fund; and
(2) Such broker or dealer gives or sends to such customer within
five business days after the end of each quarterly period, for
transactions involving investment company and periodic plans, and after
the end of each monthly period, for other transactions described in
paragraph (b)(1) of this section, a written statement disclosing each
purchase or redemption, effected for or with, and each dividend or
distribution credited to or reinvested for, the account of such customer
during the month; the date of such transaction; the identity, number,
and price of any securities purchased or redeemed by such customer in
each such transaction; the total number of shares of such securities in
such customer's account; any remuneration received or to be received by
the broker or dealer in connection therewith; and that any other
information required by paragraph (a) of this section will be furnished
upon written request: Provided, however, that the written statement may
be delivered to some other person designated by the customer for
distribution to the customer; and
(3) Such customer is provided with prior notification in writing
disclosing the intention to send the written information referred to in
paragraph (b)(1) of this section in lieu of an immediate confirmation.
(c) A broker or dealer shall give or send to a customer information
requested pursuant to this rule within 5 business days of receipt of the
request: Provided, however, That in the case of information pertaining
to a transaction effected more than 30 days prior to receipt of the
request, the information shall be given or sent to the customer within
15 business days.
(d) Definitions. For the purposes of this section:
(1) Customer shall not include a broker or dealer;
(2) Completion of the transaction shall have the meaning provided in
rule 15c1-1 under the Act;
(3) Time of the transaction means the time of execution, to the
extent feasible, of the customer's order;
(4) Debt security as used in paragraphs (a)(3), (4), and (5) only,
means any security, such as a bond, debenture, note, or any other
similar instrument which evidences a liability of the issuer (including
any such security that is convertible into stock or a similar security)
and fractional or participation interests in one or more of any of the
foregoing: Provided, however, That securities issued by an investment
company registered under the Investment Company Act of 1940 shall not be
included in this definition;
(5) Periodic plan means any written authorization for a broker
acting as agent to purchase or sell for a customer a specific security
or securities (other than securities issued by an open end investment
company or unit investment trust registered under the Investment Company
Act of 1940), in specific amounts (calculated in security units or
dollars), at specific time intervals and setting forth the commissions
or charges to be paid by the customer in connection therewith (or the
manner of calculating them); and
(6) Investment company plan means any plan under which securities
issued by an open-end investment company or
[[Page 67]]
unit investment trust registered under the Investment Company Act of
1940 are purchased by a customer (the payments being made directly to,
or made payable to, the registered investment company, or the principal
underwriter, custodian, trustee, or other designated agent of the
registered investment company), or sold by a customer pursuant to:
(i) An individual retirement or individual pension plan qualified
under the Internal Revenue Code;
(ii) A contractual or systematic agreement under which the customer
purchases at the applicable public offering price, or redeems at the
applicable redemption price, such securities in specified amounts
(calculated in security units or dollars) at specified time intervals
and setting forth the commissions or charges to be paid by such customer
in connection therewith (or the manner of calculating them; or
(iii) Any other arrangement involving a group of two or more
customers and contemplating periodic purchases of such securities by
each customer through a person designated by the group: Provided, That
such arrangement requires the registered investment company or its
agent--
(A) To give or send to the designated person, at or before the
completion of the transaction for the purchase of such securities, a
written notification of the receipt of the total amount paid by the
group;
(B) To send to anyone in the group who was a customer in the prior
quarter and on whose behalf payment has not been received in the current
quarter a quarterly written statement reflecting that a payment was not
received on his behalf; and
(C) To advise each customer in the group if a payment is not
received from the designated person on behalf of the group within 10
days of a date certain specified in the arrangement for delivery of that
payment by the designated person and thereafter to send to each such
customer the written notification described in paragraph (a) of this
section for the next three succeeding payments.
(7) NMS stock shall have the meaning provided in Sec. 242.600 of
this chapter.
(8) Payment for order flow shall mean any monetary payment, service,
property, or other benefit that results in remuneration, compensation,
or consideration to a broker or dealer from any broker or dealer,
national securities exchange, registered securities association, or
exchange member in return for the routing of customer orders by such
broker or dealer to any broker or dealer, national securities exchange,
registered securities association, or exchange member for execution,
including but not limited to: research, clearance, custody, products or
services; reciprocal agreements for the provision of order flow;
adjustment of a broker or dealer's unfavorable trading errors; offers to
participate as underwriter in public offerings; stock loans or shared
interest accrued thereon; discounts, rebates, or any other reductions of
or credits against any fee to, or expense or other financial obligation
of, the broker or dealer routing a customer order that exceeds that fee,
expense or financial obligation.
(9) Asset-backed security means a security that is primarily
serviced by the cashflows of a discrete pool of receivables or other
financial assets, either fixed or revolving, that by their terms convert
into cash within a finite time period plus any rights or other assets
designed to assure the servicing or timely distribution of proceeds to
the security holders.
(e) Security futures products. The provisions of paragraphs (a) and
(b) of this section shall not apply to a broker or dealer registered
pursuant to section 15(b)(11)(A) of the Act (15 U.S.C. 78o(b)(11)(A)) to
the extent that it effects transactions for customers in security
futures products in a futures account (as that term is defined in Sec.
240.15c3-3(a)(15)) and a broker or dealer registered pursuant to section
15(b)(1) of the Act (15 U.S.C. 78o(b)(1)) that is also a futures
commission merchant registered pursuant to section 4f(a)(1) of the
Commodity Exchange Act (7 U.S.C. 6f(a)(1)), to the extent that it
effects transactions for customers in security futures products in a
futures account (as that term is defined in Sec. 240.15c3-3(a)(15)),
Provided that:
[[Page 68]]
(1) The broker or dealer that effects any transaction for a customer
in security futures products in a futures account gives or sends to the
customer no later than the next business day after execution of any
futures securities product transaction, written notification disclosing:
(i) The date the transaction was executed, the identity of the
single security or narrow-based security index underlying the contract
for the security futures product, the number of contracts of such
security futures product purchased or sold, the price, and the delivery
month;
(ii) The source and amount of any remuneration received or to be
received by the broker or dealer in connection with the transaction,
including, but not limited to, markups, commissions, costs, fees, and
other charges incurred in connection with the transaction, provided,
however, that if no remuneration is to be paid for an initiating
transaction until the occurrence of the corresponding liquidating
transaction, that the broker or dealer may disclose the amount of
remuneration only on the confirmation for the liquidating transaction;
(iii) The fact that information about the time of the execution of
the transaction, the identity of the other party to the contract, and
whether the broker or dealer is acting as agent for such customer, as
agent for some other person, as agent for both such customer and some
other person, or as principal for its own account, and if the broker or
dealer is acting as principal, whether it is engaging in a block
transaction or an exchange of security futures products for physical
securities, will be available upon written request of the customer; and
(iv) Whether payment for order flow is received by the broker or
dealer for such transactions, the amount of this payment and the fact
that the source and nature of the compensation received in connection
with the particular transaction will be furnished upon written request
of the customer; provided, however, that brokers or dealers that do not
receive payment for order flow have no disclosure obligation under this
paragraph.
(2) Transitional provision. (i) Broker-dealers are not required to
comply with paragraph (e)(1)(iii) of this section until June 1, 2003,
Provided that, if, not withstanding the absence of the disclosure
required in that paragraph, the broker-dealer receives a written request
from a customer for the information described in paragraph (e)(1)(iii)
of this section, the broker-dealer must make the information available
to the customer; and
(ii) Broker-dealers are not required to comply with paragraph
(e)(1)(iv) of this section until June 1, 2003.
(f) The Commission may exempt any broker or dealer from the
requirements of paragraphs (a) and (b) of this section with regard to
specific transactions of specific classes of transactions for which the
broker or dealer will provide alternative procedures to effect the
purposes of this section; any such exemption may be granted subject to
compliance with such alternative procedures and upon such other stated
terms and conditions as the Commission may impose.
[43 FR 47503, Oct. 16, 1978, as amended at 48 FR 17585, Apr. 25, 1983;
50 FR 37654, Sept. 17, 1985; 53 FR 40721, Oct. 18, 1988; 59 FR 55012,
Nov. 2, 1994; 59 FR 59620, Nov. 17, 1994; 59 FR 60555, Nov. 25, 1994; 67
FR 58312, Sept. 13, 2002; 70 FR 37618, June 29, 2005]
Sec. 240.10b-13 [Reserved]
Sec. 240.10b-16 Disclosure of credit terms in margin transactions.
(a) It shall be unlawful for any broker or dealer to extend credit,
directly or indirectly, to any customer in connection with any
securities transaction unless such broker or dealer has established
procedures to assure that each customer:
(1) Is given or sent at the time of opening the account, a written
statement or statements disclosing (i) the conditions under which an
interest charge will be imposed; (ii) the annual rate or rates of
interest that can be imposed; (iii) the method of computing interest;
(iv) if rates of interest are subject to change without prior notice,
the specific conditions under which they can be changed; (v) the method
of determining the debit balance or balances on which interest is to be
charged and whether credit is to be
[[Page 69]]
given for credit balances in cash accounts; (vi) what other charges
resulting from the extension of credit, if any, will be made and under
what conditions; and (vii) the nature of any interest or lien retained
by the broker or dealer in the security or other property held as
collateral and the conditions under which additional collateral can be
required: Provided, however, That the requirements of this subparagraph
will be met in any case where the account is opened by telephone if the
information required to be disclosed is orally communicated to the
customer at that time and the required written statement or statements
are sent to the customer immediately thereafter: And provided, further,
That in the case of customers to whom credit is already being extended
on the effective date of this section, the written statement or
statements required hereunder must be given or sent to said customers
within 90 days after the effective date of this section; and
(2) Is given or sent a written statement or statements, at least
quarterly, for each account in which credit was extended, disclosing (i)
the balance at the beginning of the period; the date, amount and a brief
description of each debit and credit entered during such period; the
closing balance; and, if interest is charged for a period different from
the period covered by the statement, the balance as of the last day of
the interest period; (ii) the total interest charge for the period
during which interest is charged (or, if interest is charged separately
for separate accounts, the total interest charge for each such account),
itemized to show the dates on which the interest period began and ended;
the annual rate or rates of interest charged and the interest charge for
each such different annual rate of interest; and either each different
debit balance on which an interest calculation was based or the average
debit balance for the interest period, except that if an average debit
balance is used, a separate average debit balance must be disclosed for
each interest rate applied; and (iii) all other charges resulting from
the extension of credit in that account: Provided, however, That if the
interest charge disclosed on a statement is for a period different from
the period covered by the statement, there must be printed on the
statement appropriate language to the effect that it should be retained
for use in conjunction with the next statement containing the remainder
of the required information: And provided further, That in the case of
``equity funding programs'' registered under the Securities Act of 1933,
the requirements of this paragraph will be met if the broker or dealer
furnishes to the customer, within 1 month after each extension of
credit, a written statement or statements containing the information
required to be disclosed under this paragraph.
(b) It shall be unlawful for any broker or dealer to make any
changes in the terms and conditions under which credit charges will be
made (as described in the initial statement made under paragraph (a) of
this section), unless the customer shall have been given not less than
thirty (30) days written notice of such changes, except that no such
prior notice shall be necessary where such changes are required by law:
Provided, however, That if any change for which prior notice would
otherwise be required under this paragraph results in a lower interest
charge to the customer than would have been imposed before the change,
notice of such change may be given within a reasonable time after the
effective date of the change.
(15 U.S.C. 78j)
[34 FR 19718, Dec. 16, 1969]
Sec. 240.10b-17 Untimely announcements of record dates.
(a) It shall constitute a ``manipulative or deceptive device or
contrivance'' as used in section 10(b) of the Act for any issuer of a
class of securities publicly traded by the use of any means or
instrumentality of interstate commerce or of the mails or of any
facility of any national securities exchange to fail to give notice in
accordance with paragraph (b) of this section of the following actions
relating to such class of securities:
(1) A dividend or other distribution in cash or in kind, except an
ordinary interest payment on a debt security, but including a dividend
or distribution of
[[Page 70]]
any security of the same or another issuer;
(2) A stock split or reverse split; or
(3) A rights or other subscription offering.
(b) Notice shall be deemed to have been given in accordance with
this section only if:
(1) Given to the National Association of Securities Dealers, Inc.,
no later than 10 days prior to the record date involved or, in case of a
rights subscription or other offering if such 10 days advance notice is
not practical, on or before the record date and in no event later than
the effective date of the registration statement to which the offering
relates, and such notice includes:
(i) Title of the security to which the declaration relates;
(ii) Date of declaration;
(iii) Date of record for determining holders entitled to receive the
dividend or other distribution or to participate in the stock or reverse
split;
(iv) Date of payment or distribution or, in the case of a stock or
reverse split or rights or other subscription offering, the date of
delivery;
(v) For a dividend or other distribution including a stock or
reverse split or rights or other subscription offering:
(a) In cash, the amount of cash to be paid or distributed per share,
except if exact per share cash distributions cannot be given because of
existing conversion rights which may be exercised during the notice
period and which may affect the per share cash distribution, then a
reasonable approximation of the per share distribution may be provided
so long as the actual per share distribution is subsequently provided on
the record date,
(b) In the same security, the amount of the security outstanding
immediately prior to and immediately following the dividend or
distribution and the rate of the dividend or distribution,
(c) In any other security of the same issuer, the amount to be paid
or distributed and the rate of the dividend or distribution,
(d) In any security of another issuer, the name of the issuer and
title of that security, the amount to be paid or distributed, and the
rate of the dividend or distribution and if that security is a right or
a warrant, the subscription price,
(e) In any other property (including securities not covered under
paragraphs (b)(1)(v) (b) through (d) of this section) the identity of
the property and its value and basis for assigning that value;
(vi) Method of settlement of fractional interests;
(vii) Details of any condition which must be satisfied or Government
approval which must be secured to enable payment of distribution; and in
(viii) The case of stock or reverse split in addition to the
aforementioned information;
(a) The name and address of the transfer or exchange agent; or
(2) The Commission, upon written request or upon its own motion,
exempts the issuer from compliance with paragraph (b)(1) of this section
either unconditionally or on specified terms or conditions, as not
constituting a manipulative or deceptive device or contrivance
comprehended within the purpose of this section; or
(3) Given in accordance with procedures of the national securities
exchange or exchanges upon which a security of such issuer is registered
pursuant to section 12 of the Act which contain requirements
substantially comparable to those set forth in paragraph (b)(1) of this
section.
(c) The provisions of this rule shall not apply, however, to
redeemable securities issued by open-end investment companies and unit
investment trusts registered with the Commission under the Investment
Company Act of 1940.
(Secs. 10(b), 23(a), 48 Stat. 891, as amended, 49 Stat. 1379, 15 U.S.C.
78j)
[36 FR 11514, June 15, 1971, as amended at 37 FR 4330, Mar. 2, 1972]
Sec. 240.10b-18 Purchases of certain equity securities by the issuer
and others.
Preliminary Notes to Sec. 240.10b-18
1. Section 240.10b-18 provides an issuer (and its affiliated
purchasers) with a ``safe harbor'' from liability for manipulation under
sections 9(a)(2) of the Act and Sec. 240.10b-5 under the Act solely by
reason of the manner, timing, price, and volume of their repurchases
[[Page 71]]
when they repurchase the issuer's common stock in the market in
accordance with the section's manner, timing, price, and volume
conditions. As a safe harbor, compliance with Sec. 240.10b-18 is
voluntary. To come within the safe harbor, however, an issuer's
repurchases must satisfy (on a daily basis) each of the section's four
conditions. Failure to meet any one of the four conditions will remove
all of the issuer's repurchases from the safe harbor for that day. The
safe harbor, moreover, is not available for repurchases that, although
made in technical compliance with the section, are part of a plan or
scheme to evade the federal securities laws.
2. Regardless of whether the repurchases are effected in accordance
with Sec. 240.10b-18, reporting issuers must report their repurchasing
activity as required by Item 703 of Regulations S-K and S-B (17 CFR
229.703 and 228.703) and Item 15(e) of Form 20-F (17 CFR 249.220f)
(regarding foreign private issuers), and closed-end management
investment companies that are registered under the Investment Company
Act of 1940 must report their repurchasing activity as required by Item
8 of Form N-CSR (17 CFR 249.331; 17 CFR 274.128).
(a) Definitions. Unless otherwise provided, all terms used in this
section shall have the same meaning as in the Act. In addition, the
following definitions shall apply:
(1) ADTV means the average daily trading volume reported for the
security during the four calendar weeks preceding the week in which the
Rule 10b-18 purchase is to be effected.
(2) Affiliate means any person that directly or indirectly controls,
is controlled by, or is under common control with, the issuer.
(3) Affiliated purchaser means:
(i) A person acting, directly or indirectly, in concert with the
issuer for the purpose of acquiring the issuer's securities; or
(ii) An affiliate who, directly or indirectly, controls the issuer's
purchases of such securities, whose purchases are controlled by the
issuer, or whose purchases are under common control with those of the
issuer; Provided, however, that ``affiliated purchaser'' shall not
include a broker, dealer, or other person solely by reason of such
broker, dealer, or other person effecting Rule 10b-18 purchases on
behalf of the issuer or for its account, and shall not include an
officer or director of the issuer solely by reason of that officer or
director's participation in the decision to authorize Rule 10b-18
purchases by or on behalf of the issuer.
(4) Agent independent of the issuer has the meaning contained in
Sec. 242.100 of this chapter.
(5) Block means a quantity of stock that either:
(i) Has a purchase price of $200,000 or more; or
(ii) Is at least 5,000 shares and has a purchase price of at least
$50,000; or
(iii) Is at least 20 round lots of the security and totals 150
percent or more of the trading volume for that security or, in the event
that trading volume data are unavailable, is at least 20 round lots of
the security and totals at least one-tenth of one percent (.001) of the
outstanding shares of the security, exclusive of any shares owned by any
affiliate; Provided, however, That a block under paragraph (a)(5)(i),
(ii), and (iii) shall not include any amount a broker or dealer, acting
as principal, has accumulated for the purpose of sale or resale to the
issuer or to any affiliated purchaser of the issuer if the issuer or
such affiliated purchaser knows or has reason to know that such amount
was accumulated for such purpose, nor shall it include any amount that a
broker or dealer has sold short to the issuer or to any affiliated
purchaser of the issuer if the issuer or such affiliated purchaser knows
or has reason to know that the sale was a short sale.
(6) Consolidated system means a consolidated transaction or
quotation reporting system that collects and publicly disseminates on a
current and continuous basis transaction or quotation information in
common equity securities pursuant to an effective transaction reporting
plan or an effective national market system plan (as those terms are
defined in Sec. 242.600 of this chapter).
(7) Market-wide trading suspension means a market-wide trading halt
of 30 minutes or more that is:
[[Page 72]]
(i) Imposed pursuant to the rules of a national securities exchange
or a national securities association in response to a market-wide
decline during a single trading session; or
(ii) Declared by the Commission pursuant to its authority under
section 12(k) of the Act (15 U.S.C. 78l (k)).
(8) Plan has the meaning contained in Sec. 242.100 of this chapter.
(9) Principal market for a security means the single securities
market with the largest reported trading volume for the security during
the six full calendar months preceding the week in which the Rule 10b-18
purchase is to be effected.
(10) Public float value has the meaning contained in Sec. 242.100
of this chapter.
(11) Purchase price means the price paid per share as reported,
exclusive of any commission paid to a broker acting as agent, or
commission equivalent, mark-up, or differential paid to a dealer.
(12) Riskless principal transaction means a transaction in which a
broker or dealer after having received an order from an issuer to buy
its security, buys the security as principal in the market at the same
price to satisfy the issuer's buy order. The issuer's buy order must be
effected at the same price per-share at which the broker or dealer
bought the shares to satisfy the issuer's buy order, exclusive of any
explicitly disclosed markup or markdown, commission equivalent, or other
fee. In addition, only the first leg of the transaction, when the broker
or dealer buys the security in the market as principal, is reported
under the rules of a self-regulatory organization or under the Act. For
purposes of this section, the broker or dealer must have written
policies and procedures in place to assure that, at a minimum, the
issuer's buy order was received prior to the offsetting transaction; the
offsetting transaction is allocated to a riskless principal account or
the issuer's account within 60 seconds of the execution; and the broker
or dealer has supervisory systems in place to produce records that
enable the broker or dealer to accurately and readily reconstruct, in a
time-sequenced manner, all orders effected on a riskless principal
basis.
(13) Rule 10b-18 purchase means a purchase (or any bid or limit
order that would effect such purchase) of an issuer's common stock (or
an equivalent interest, including a unit of beneficial interest in a
trust or limited partnership or a depository share) by or for the issuer
or any affiliated purchaser (including riskless principal transactions).
However, it does not include any purchase of such security:
(i) Effected during the applicable restricted period of a
distribution that is subject to Sec. 242.102 of this chapter;
(ii) Effected by or for an issuer plan by an agent independent of
the issuer;
(iii) Effected as a fractional share purchase (a fractional interest
in a security) evidenced by a script certificate, order form, or similar
document;
(iv) Effected during the period from the time of public announcement
(as defined in Sec. 230.165(f)) of a merger, acquisition, or similar
transaction involving a recapitalization, until the earlier of the
completion of such transaction or the completion of the vote by target
shareholders. This exclusion does not apply to Rule 10b-18 purchases:
(A) Effected during such transaction in which the consideration is
solely cash and there is no valuation period; or
(B) Where:
(1) The total volume of Rule 10b-18 purchases effected on any single
day does not exceed the lesser of 25% of the security's four-week ADTV
or the issuer's average daily Rule 10b-18 purchases during the three
full calendar months preceding the date of the announcement of such
transaction;
(2) The issuer's block purchases effected pursuant to paragraph
(b)(4) of this section do not exceed the average size and frequency of
the issuer's block purchases effected pursuant to paragraph (b)(4) of
this section during the three full calendar months preceding the date of
the announcement of such transaction; and
(3) Such purchases are not otherwise restricted or prohibited;
(v) Effected pursuant to Sec. 240.13e-1;
(vi) Effected pursuant to a tender offer that is subject to Sec.
240.13e-4 or specifically excepted from Sec. 240.13e-4; or
[[Page 73]]
(vii) Effected pursuant to a tender offer that is subject to section
14(d) of the Act (15 U.S.C. 78n(d)) and the rules and regulations
thereunder.
(b) Conditions to be met. Rule 10b-18 purchases shall not be deemed
to have violated the anti-manipulation provisions of sections 9(a)(2) or
10(b) of the Act (15 U.S.C. 78i(a)(2) or 78j(b)), or Sec. 240.10b-5
under the Act, solely by reason of the time, price, or amount of the
Rule 10b-18 purchases, or the number of brokers or dealers used in
connection with such purchases, if the issuer or affiliated purchaser of
the issuer effects the Rule 10b-18 purchases according to each of the
following conditions:
(1) One broker or dealer. Rule 10b-18 purchases must be effected
from or through only one broker or dealer on any single day; Provided,
however, that:
(i) The ``one broker or dealer'' condition shall not apply to Rule
10b-18 purchases that are not solicited by or on behalf of the issuer or
its affiliated purchaser(s);
(ii) Where Rule 10b-18 purchases are effected by or on behalf of
more than one affiliated purchaser of the issuer (or the issuer and one
or more of its affiliated purchasers) on a single day, the issuer and
all affiliated purchasers must use the same broker or dealer; and
(iii) Where Rule 10b-18 purchases are effected on behalf of the
issuer by a broker-dealer that is not an electronic communication
network (ECN) or other alternative trading system (ATS), that broker-
dealer can access ECN or other ATS liquidity in order to execute
repurchases on behalf of the issuer (or any affiliated purchaser of the
issuer) on that day.
(2) Time of purchases. Rule 10b-18 purchases must not be:
(i) The opening (regular way) purchase reported in the consolidated
system;
(ii) Effected during the 10 minutes before the scheduled close of
the primary trading session in the principal market for the security,
and the 10 minutes before the scheduled close of the primary trading
session in the market where the purchase is effected, for a security
that has an ADTV value of $1 million or more and a public float value of
$150 million or more; and
(iii) Effected during the 30 minutes before the scheduled close of
the primary trading session in the principal market for the security,
and the 30 minutes before the scheduled close of the primary trading
session in the market where the purchase is effected, for all other
securities;
(iv) However, for purposes of this section, Rule 10b-18 purchases
may be effected following the close of the primary trading session until
the termination of the period in which last sale prices are reported in
the consolidated system so long as such purchases are effected at prices
that do not exceed the lower of the closing price of the primary trading
session in the principal market for the security and any lower bids or
sale prices subsequently reported in the consolidated system, and all of
this section's conditions are met. However, for purposes of this
section, the issuer may use one broker or dealer to effect Rule 10b-18
purchases during this period that may be different from the broker or
dealer that it used during the primary trading session. However, the
issuer's Rule 10b-18 purchase may not be the opening transaction of the
session following the close of the primary trading session.
(3) Price of purchases. Rule 10b-18 purchases must be effected at a
purchase price that:
(i) Does not exceed the highest independent bid or the last
independent transaction price, whichever is higher, quoted or reported
in the consolidated system at the time the Rule 10b-18 purchase is
effected;
(ii) For securities for which bids and transaction prices are not
quoted or reported in the consolidated system, Rule 10b-18 purchases
must be effected at a purchase price that does not exceed the highest
independent bid or the last independent transaction price, whichever is
higher, displayed and disseminated on any national securities exchange
or on any inter-dealer quotation system (as defined in Sec. 240.15c2-
11) that displays at least two priced quotations for the security, at
the time the Rule 10b-18 purchase is effected; and
(iii) For all other securities, Rule 10b-18 purchases must be
effected at a
[[Page 74]]
price no higher than the highest independent bid obtained from three
independent dealers.
(4) Volume of purchases. The total volume of Rule 10b-18 purchases
effected by or for the issuer and any affiliated purchasers effected on
any single day must not exceed 25 percent of the ADTV for that security;
However, once each week, in lieu of purchasing under the 25 percent of
ADTV limit for that day, the issuer or an affiliated purchaser of the
issuer may effect one block purchase if:
(i) No other Rule 10b-18 purchases are effected that day, and
(ii) The block purchase is not included when calculating a
security's four week ADTV under this section.
(c) Alternative conditions. The conditions of paragraph (b) of this
section shall apply in connection with Rule 10b-18 purchases effected
during a trading session following the imposition of a market-wide
trading suspension, except:
(1) That the time of purchases condition in paragraph (b)(2) of this
section shall not apply, either:
(i) From the reopening of trading until the scheduled close of
trading on the day that the market-wide trading suspension is imposed;
or
(ii) At the opening of trading on the next trading day until the
scheduled close of trading that day, if a market-wide trading suspension
was in effect at the close of trading on the preceding day; and
(2) The volume of purchases condition in paragraph (b)(4) of this
section is modified so that the amount of Rule 10b-18 purchases must not
exceed 100 percent of the ADTV for that security.
(d) Other purchases. No presumption shall arise that an issuer or an
affiliated purchaser has violated the anti-manipulation provisions of
sections 9(a)(2) or 10(b) of the Act (15 U.S.C. 78i(a)(2) or 78j(b)), or
Sec. 240.10b-5 under the Act, if the Rule 10b-18 purchases of such
issuer or affiliated purchaser do not meet the conditions specified in
paragraph (b) or (c) of this section.
[68 FR 64970, Nov. 17, 2003, as amended at 70 FR 37618, June 29, 2005]
Sec. 240.10b-21 [Reserved]
Reports Under Section 10A
Sec. 240.10A-1 Notice to the Commission Pursuant to Section 10A of
the Act.
(a)(1) If any issuer with a reporting obligation under the Act
receives a report requiring a notice to the Commission in accordance
with section 10A(b)(3) of the Act, 15 U.S.C. 78j-1(b)(3), the issuer
shall submit such notice to the Commission's Office of the Chief
Accountant within the time period prescribed in that section. The notice
may be provided by facsimile, telegraph, personal delivery, or any other
means, provided it is received by the Office of the Chief Accountant
within the required time period.
(2) The notice specified in paragraph (a)(1) of this section shall
be in writing and:
(i) Shall identify the issuer (including the issuer's name, address,
phone number, and file number assigned to the issuer's filings by the
Commission) and the independent accountant (including the independent
accountant's name and phone number, and the address of the independent
accountant's principal office);
(ii) Shall state the date that the issuer received from the
independent accountant the report specified in section 10A(b)(2) of the
Act, 15 U.S.C. 78j-1(b)(2);
(iii) Shall provide, at the election of the issuer, either:
(A) A summary of the independent accountant's report, including a
description of the act that the independent accountant has identified as
a likely illegal act and the possible effect of that act on all affected
financial statements of the issuer or those related to the most current
three-year period, whichever is shorter; or
(B) A copy of the independent accountant's report; and
(iv) May provide additional information regarding the issuer's views
of and response to the independent accountant's report.
(3) Reports of the independent accountant submitted by the issuer to
the Commission's Office of the Chief Accountant in accordance with
paragraph (a)(2)(iii)(B) of this section shall
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be deemed to have been made pursuant to section 10A(b)(3) or section
10A(b)(4) of the Act, 15 U.S.C. 78j-1(b)(3) or 78j-1(b)(4), for purposes
of the safe harbor provided by section 10A(c) of the Act, 15 U.S.C. 78j-
1(c).
(4) Submission of the notice in paragraphs (a)(1) and (a)(2) of this
section shall not relieve the issuer from its obligations to comply
fully with all other reporting requirements, including, without
limitation:
(i) The filing requirements of Form 8-K, Sec. 249.308 of this
chapter, and Form N-SAR, Sec. 274.101 of this chapter, regarding a
change in the issuer's certifying accountant and
(ii) The disclosure requirements of item 304 of Regulation S-B or
item 304 of Regulation S-K, Sec. Sec. 228.304 or 229.304 of this
chapter.
(b)(1) Any independent accountant furnishing to the Commission a
copy of a report (or the documentation of any oral report) in accordance
with section 10A(b)(3) or section 10A(b)(4) of the Act, 15 U.S.C. 78j-
1(b)(3) or 78j-1(b)(4), shall submit that report (or documentation) to
the Commission's Office of the Chief Accountant within the time period
prescribed by the appropriate section of the Act. The report (or
documentation) may be submitted to the Commission's Office of the Chief
Accountant by facsimile, telegraph, personal delivery, or any other
means, provided it is received by the Office of the Chief Accountant
within the time period set forth in section 10A(b)(3) or 10A(b)(4) of
the Act, 15 U.S.C. 78j-1(b)(3) or 78j-(b)(4), whichever is applicable in
the circumstances.
(2) If the report (or documentation) submitted to the Office of the
Chief Accountant in accordance with paragraph (b)(1) of this section
does not clearly identify both the issuer (including the issuer's name,
address, phone number, and file number assigned to the issuer's filings
with the Commission) and the independent accountant (including the
independent accountant's name and phone number, and the address of the
independent accountant's principal office), then the independent
accountant shall place that information in a prominent attachment to the
report (or documentation) and shall submit that attachment to the Office
of the Chief Accountant at the same time and in the same manner as the
report (or documentation) is submitted to that Office.
(3) Submission of the report (or documentation) by the independent
accountant as described in paragraphs (b)(1) and (b)(2) of this section
shall not replace, or otherwise satisfy the need for, the newly engaged
and former accountants' letters under items 304(a)(2)(D) and 304(a)(3)
of Regulation S-K, Sec. Sec. 229.304(a)(2)(D) and 229.304(a)(3) of this
chapter, respectively, and under items 304(a)(2)(D) and 304(a)(3) of
Regulation S-B, Sec. Sec. 228.304(a)(2)(D) and 228.304(a)(3) of this
chapter, respectively, and shall not limit, reduce, or affect in any way
the independent accountant's obligations to comply fully with all other
legal and professional responsibilities, including, without limitation,
those under generally accepted auditing standards and the rules or
interpretations of the Commission that modify or supplement those
auditing standards.
(c) A notice or report submitted to the Office of the Chief
Accountant in accordance with paragraphs (a) and (b) of this section
shall be deemed to be an investigative record and shall be non-public
and exempt from disclosure pursuant to the Freedom of Information Act to
the same extent and for the same periods of time that the Commission's
investigative records are non-public and exempt from disclosure under,
among other applicable provisions, 5 U.S.C. 552(b)(7) and Sec.
200.80(b)(7) of this chapter. Nothing in this paragraph, however, shall
relieve, limit, delay, or affect in any way, the obligation of any
issuer or any independent accountant to make all public disclosures
required by law, by any Commission disclosure item, rule, report, or
form, or by any applicable accounting, auditing, or professional
standard.
Instruction to Paragraph (c)
Issuers and independent accountants may apply for additional bases
for confidential treatment for a notice, report, or part thereof, in
accordance with Sec. 200.83 of this chapter. That section indicates, in
part, that any person who, pursuant to any requirement of law, submits
any information or causes or
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permits any information to be submitted to the Commission, may request
that the Commission afford it confidential treatment by reason of
personal privacy or business confidentiality, or for any other reason
permitted by Federal law.
[62 FR 12749, Mar. 18, 1997]
Sec. 240.10A-2 Auditor independence.
It shall be unlawful for an auditor not to be independent under
Sec. 210.2-01(c)(2)(iii)(B), (c)(4), (c)(6), (c)(7), and Sec. 210.2-
07.
[68 FR 6048, Feb. 5, 2003]
Sec. 240.10A-3 Listing standards relating to audit committees.
(a) Pursuant to section 10A(m) of the Act (15 U.S.C. 78j-1(m)) and
section 3 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7202):
(1) National securities exchanges. The rules of each national
securities exchange registered pursuant to section 6 of the Act (15
U.S.C. 78f) must, in accordance with the provisions of this section,
prohibit the initial or continued listing of any security of an issuer
that is not in compliance with the requirements of any portion of
paragraph (b) or (c) of this section.
(2) National securities associations. The rules of each national
securities association registered pursuant to section 15A of the Act (15
U.S.C. 78o-3) must, in accordance with the provisions of this section,
prohibit the initial or continued listing in an automated inter-dealer
quotation system of any security of an issuer that is not in compliance
with the requirements of any portion of paragraph (b) or (c) of this
section.
(3) Opportunity to cure defects. The rules required by paragraphs
(a)(1) and (a)(2) of this section must provide for appropriate
procedures for a listed issuer to have an opportunity to cure any
defects that would be the basis for a prohibition under paragraph (a) of
this section, before the imposition of such prohibition. Such rules also
may provide that if a member of an audit committee ceases to be
independent in accordance with the requirements of this section for
reasons outside the member's reasonable control, that person, with
notice by the issuer to the applicable national securities exchange or
national securities association, may remain an audit committee member of
the listed issuer until the earlier of the next annual shareholders
meeting of the listed issuer or one year from the occurrence of the
event that caused the member to be no longer independent.
(4) Notification of noncompliance. The rules required by paragraphs
(a)(1) and (a)(2) of this section must include a requirement that a
listed issuer must notify the applicable national securities exchange or
national securities association promptly after an executive officer of
the listed issuer becomes aware of any material noncompliance by the
listed issuer with the requirements of this section.
(5) Implementation. (i) The rules of each national securities
exchange or national securities association meeting the requirements of
this section must be operative, and listed issuers must be in compliance
with those rules, by the following dates:
(A) July 31, 2005 for foreign private issuers and small business
issuers (as defined in Sec. 240.12b-2); and
(B) For all other listed issuers, the earlier of the listed issuer's
first annual shareholders meeting after January 15, 2004, or October 31,
2004.
(ii) Each national securities exchange and national securities
association must provide to the Commission, no later than July 15, 2003,
proposed rules or rule amendments that comply with this section.
(iii) Each national securities exchange and national securities
association must have final rules or rule amendments that comply with
this section approved by the Commission no later than December 1, 2003.
(b) Required standards--(1) Independence. (i) Each member of the
audit committee must be a member of the board of directors of the listed
issuer, and must otherwise be independent; provided that, where a listed
issuer is one of two dual holding companies, those companies may
designate one audit committee for both companies so long as each member
of the audit committee is a member of the board of directors of at least
one of such dual holding companies.
[[Page 77]]
(ii) Independence requirements for non-investment company issuers.
In order to be considered to be independent for purposes of this
paragraph (b)(1), a member of an audit committee of a listed issuer that
is not an investment company may not, other than in his or her capacity
as a member of the audit committee, the board of directors, or any other
board committee:
(A) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer or any subsidiary thereof, provided
that, unless the rules of the national securities exchange or national
securities association provide otherwise, compensatory fees do not
include the receipt of fixed amounts of compensation under a retirement
plan (including deferred compensation) for prior service with the listed
issuer (provided that such compensation is not contingent in any way on
continued service); or
(B) Be an affiliated person of the issuer or any subsidiary thereof.
(iii) Independence requirements for investment company issuers. In
order to be considered to be independent for purposes of this paragraph
(b)(1), a member of an audit committee of a listed issuer that is an
investment company may not, other than in his or her capacity as a
member of the audit committee, the board of directors, or any other
board committee:
(A) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer or any subsidiary thereof, provided
that, unless the rules of the national securities exchange or national
securities association provide otherwise, compensatory fees do not
include the receipt of fixed amounts of compensation under a retirement
plan (including deferred compensation) for prior service with the listed
issuer (provided that such compensation is not contingent in any way on
continued service); or
(B) Be an ``interested person'' of the issuer as defined in section
2(a)(19) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(19)).
(iv) Exemptions from the independence requirements. (A) For an
issuer listing securities pursuant to a registration statement under
section 12 of the Act (15 U.S.C. 78l), or for an issuer that has a
registration statement under the Securities Act of 1933 (15 U.S.C. 77a
et seq.) covering an initial public offering of securities to be listed
by the issuer, where in each case the listed issuer was not, immediately
prior to the effective date of such registration statement, required to
file reports with the Commission pursuant to section 13(a) or 15(d) of
the Act (15 U.S.C. 78m(a) or 78o(d)):
(1) All but one of the members of the listed issuer's audit
committee may be exempt from the independence requirements of paragraph
(b)(1)(ii) of this section for 90 days from the date of effectiveness of
such registration statement; and
(2) A minority of the members of the listed issuer's audit committee
may be exempt from the independence requirements of paragraph (b)(1)(ii)
of this section for one year from the date of effectiveness of such
registration statement.
(B) An audit committee member that sits on the board of directors of
a listed issuer and an affiliate of the listed issuer is exempt from the
requirements of paragraph (b)(1)(ii)(B) of this section if the member,
except for being a director on each such board of directors, otherwise
meets the independence requirements of paragraph (b)(1)(ii) of this
section for each such entity, including the receipt of only ordinary-
course compensation for serving as a member of the board of directors,
audit committee or any other board committee of each such entity.
(C) An employee of a foreign private issuer who is not an executive
officer of the foreign private issuer is exempt from the requirements of
paragraph (b)(1)(ii) of this section if the employee is elected or named
to the board of directors or audit committee of the foreign private
issuer pursuant to the issuer's governing law or documents, an employee
collective bargaining or similar agreement or other home country legal
or listing requirements.
(D) An audit committee member of a foreign private issuer may be
exempt from the requirements of paragraph (b)(1)(ii)(B) of this section
if that member meets the following requirements:
(1) The member is an affiliate of the foreign private issuer or a
representative of such an affiliate;
[[Page 78]]
(2) The member has only observer status on, and is not a voting
member or the chair of, the audit committee; and
(3) Neither the member nor the affiliate is an executive officer of
the foreign private issuer.
(E) An audit committee member of a foreign private issuer may be
exempt from the requirements of paragraph (b)(1)(ii)(B) of this section
if that member meets the following requirements:
(1) The member is a representative or designee of a foreign
government or foreign governmental entity that is an affiliate of the
foreign private issuer; and
(2) The member is not an executive officer of the foreign private
issuer.
(F) In addition to paragraphs (b)(1)(iv)(A) through (E) of this
section, the Commission may exempt from the requirements of paragraphs
(b)(1)(ii) or (b)(1)(iii) of this section a particular relationship with
respect to audit committee members, as the Commission determines
appropriate in light of the circumstances.
(2) Responsibilities relating to registered public accounting firms.
The audit committee of each listed issuer, in its capacity as a
committee of the board of directors, must be directly responsible for
the appointment, compensation, retention and oversight of the work of
any registered public accounting firm engaged (including resolution of
disagreements between management and the auditor regarding financial
reporting) for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the listed issuer,
and each such registered public accounting firm must report directly to
the audit committee.
(3) Complaints. Each audit committee must establish procedures for:
(i) The receipt, retention, and treatment of complaints received by
the listed issuer regarding accounting, internal accounting controls, or
auditing matters; and
(ii) The confidential, anonymous submission by employees of the
listed issuer of concerns regarding questionable accounting or auditing
matters.
(4) Authority to engage advisers. Each audit committee must have the
authority to engage independent counsel and other advisers, as it
determines necessary to carry out its duties.
(5) Funding. Each listed issuer must provide for appropriate
funding, as determined by the audit committee, in its capacity as a
committee of the board of directors, for payment of:
(i) Compensation to any registered public accounting firm engaged
for the purpose of preparing or issuing an audit report or performing
other audit, review or attest services for the listed issuer;
(ii) Compensation to any advisers employed by the audit committee
under paragraph (b)(4) of this section; and
(iii) Ordinary administrative expenses of the audit committee that
are necessary or appropriate in carrying out its duties.
(c) General exemptions. (1) At any time when an issuer has a class
of securities that is listed on a national securities exchange or
national securities association subject to the requirements of this
section, the listing of other classes of securities of the listed issuer
on a national securities exchange or national securities association is
not subject to the requirements of this section.
(2) At any time when an issuer has a class of common equity
securities (or similar securities) that is listed on a national
securities exchange or national securities association subject to the
requirements of this section, the listing of classes of securities of a
direct or indirect consolidated subsidiary or an at least 50%
beneficially owned subsidiary of the issuer (except classes of equity
securities, other than non-convertible, non-participating preferred
securities, of such subsidiary) is not subject to the requirements of
this section.
(3) The listing of securities of a foreign private issuer is not
subject to the requirements of paragraphs (b)(1) through (b)(5) of this
section if the foreign private issuer meets the following requirements:
(i) The foreign private issuer has a board of auditors (or similar
body), or has statutory auditors, established and selected pursuant to
home country
[[Page 79]]
legal or listing provisions expressly requiring or permitting such a
board or similar body;
(ii) The board or body, or statutory auditors is required under home
country legal or listing requirements to be either:
(A) Separate from the board of directors; or
(B) Composed of one or more members of the board of directors and
one or more members that are not also members of the board of directors;
(iii) The board or body, or statutory auditors, are not elected by
management of such issuer and no executive officer of the foreign
private issuer is a member of such board or body, or statutory auditors;
(iv) Home country legal or listing provisions set forth or provide
for standards for the independence of such board or body, or statutory
auditors, from the foreign private issuer or the management of such
issuer;
(v) Such board or body, or statutory auditors, in accordance with
any applicable home country legal or listing requirements or the
issuer's governing documents, are responsible, to the extent permitted
by law, for the appointment, retention and oversight of the work of any
registered public accounting firm engaged (including, to the extent
permitted by law, the resolution of disagreements between management and
the auditor regarding financial reporting) for the purpose of preparing
or issuing an audit report or performing other audit, review or attest
services for the issuer; and
(vi) The audit committee requirements of paragraphs (b)(3), (b)(4)
and (b)(5) of this section apply to such board or body, or statutory
auditors, to the extent permitted by law.
(4) The listing of a security futures product cleared by a clearing
agency that is registered pursuant to section 17A of the Act (15 U.S.C.
78q-1) or that is exempt from the registration requirements of section
17A pursuant to paragraph (b)(7)(A) of such section is not subject to
the requirements of this section.
(5) The listing of a standardized option, as defined in Sec.
240.9b-1(a)(4), issued by a clearing agency that is registered pursuant
to section 17A of the Act (15 U.S.C. 78q-1) is not subject to the
requirements of this section.
(6) The listing of securities of the following listed issuers are
not subject to the requirements of this section:
(i) Asset-Backed Issuers (as defined in Sec. 229.1101 of this
chapter);
(ii) Unit investment trusts (as defined in 15 U.S.C. 80a-4(2)); and
(iii)Foreign governments (as defined in Sec. 240.3b-4(a)).
(7) The listing of securities of a listed issuer is not subject to
the requirements of this section if:
(i) The listed issuer, as reflected in the applicable listing
application, is organized as a trust or other unincorporated association
that does not have a board of directors or persons acting in a similar
capacity; and
(ii) The activities of the listed issuer that is described in
paragraph (c)(7)(i) of this section are limited to passively owning or
holding (as well as administering and distributing amounts in respect
of) securities, rights, collateral or other assets on behalf of or for
the benefit of the holders of the listed securities.
(d) Disclosure. Any listed issuer availing itself of an exemption
from the independence standards contained in paragraph (b)(1)(iv) of
this section (except paragraph (b)(1)(iv)(B) of this section), the
general exemption contained in paragraph (c)(3) of this section or the
last sentence of paragraph (a)(3) of this section, must:
(1) Disclose its reliance on the exemption and its assessment of
whether, and if so, how, such reliance would materially adversely affect
the ability of the audit committee to act independently and to satisfy
the other requirements of this section in any proxy or information
statement for a meeting of shareholders at which directors are elected
that is filed with the Commission pursuant to the requirements of
section 14 of the Act (15 U.S.C. 78n); and
(2) Disclose the information specified in paragraph (d)(1) of this
section in, or incorporate such information by reference from such proxy
or information statement filed with the Commission into, its annual
report filed with the
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Commission pursuant to the requirements of section 13(a) or 15(d) of the
Act (15 U.S.C. 78m(a) or 78o(d)).
(e) Definitions. Unless the context otherwise requires, all terms
used in this section have the same meaning as in the Act. In addition,
unless the context otherwise requires, the following definitions apply
for purposes of this section:
(1)(i) The term affiliate of, or a person affiliated with, a
specified person, means a person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, the person specified.
(ii)(A) A person will be deemed not to be in control of a specified
person for purposes of this section if the person:
(1) Is not the beneficial owner, directly or indirectly, of more
than 10% of any class of voting equity securities of the specified
person; and
(2) Is not an executive officer of the specified person.
(B) Paragraph (e)(1)(ii)(A) of this section only creates a safe
harbor position that a person does not control a specified person. The
existence of the safe harbor does not create a presumption in any way
that a person exceeding the ownership requirement in paragraph
(e)(1)(ii)(A)(1) of this section controls or is otherwise an affiliate
of a specified person.
(iii) The following will be deemed to be affiliates:
(A) An executive officer of an affiliate;
(B) A director who also is an employee of an affiliate;
(C) A general partner of an affiliate; and
(D) A managing member of an affiliate.
(iv) For purposes of paragraph (e)(1)(i) of this section, dual
holding companies will not be deemed to be affiliates of or persons
affiliated with each other by virtue of their dual holding company
arrangements with each other, including where directors of one dual
holding company are also directors of the other dual holding company, or
where directors of one or both dual holding companies are also directors
of the businesses jointly controlled, directly or indirectly, by the
dual holding companies (and, in each case, receive only ordinary-course
compensation for serving as a member of the board of directors, audit
committee or any other board committee of the dual holding companies or
any entity that is jointly controlled, directly or indirectly, by the
dual holding companies).
(2) In the case of foreign private issuers with a two-tier board
system, the term board of directors means the supervisory or non-
management board.
(3) In the case of a listed issuer that is a limited partnership or
limited liability company where such entity does not have a board of
directors or equivalent body, the term board of directors means the
board of directors of the managing general partner, managing member or
equivalent body.
(4) The term control (including the terms controlling, controlled by
and under common control with) means the possession, direct or indirect,
of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
(5) The term dual holding companies means two foreign private
issuers that:
(i) Are organized in different national jurisdictions;
(ii) Collectively own and supervise the management of one or more
businesses which are conducted as a single economic enterprise; and
(iii) Do not conduct any business other than collectively owning and
supervising such businesses and activities reasonably incidental
thereto.
(6) The term executive officer has the meaning set forth in Sec.
240.3b-7.
(7) The term foreign private issuer has the meaning set forth in
Sec. 240.3b-4(c).
(8) The term indirect acceptance by a member of an audit committee
of any consulting, advisory or other compensatory fee includes
acceptance of such a fee by a spouse, a minor child or stepchild or a
child or stepchild sharing a home with the member or by an entity in
which such member is a partner, member, an officer such as a managing
director occupying a comparable position or executive officer, or
occupies a similar position (except limited partners, non-managing
members and those
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occupying similar positions who, in each case, have no active role in
providing services to the entity) and which provides accounting,
consulting, legal, investment banking or financial advisory services to
the issuer or any subsidiary of the issuer.
(9) The terms listed and listing refer to securities listed on a
national securities exchange or listed in an automated inter-dealer
quotation system of a national securities association or to issuers of
such securities.
Instructions to Sec. 240.10A-3
1. The requirements in paragraphs (b)(2) through (b)(5), (c)(3)(v)
and (c)(3)(vi) of this section do not conflict with, and do not affect
the application of, any requirement or ability under a listed issuer's
governing law or documents or other home country legal or listing
provisions that requires or permits shareholders to ultimately vote on,
approve or ratify such requirements. The requirements instead relate to
the assignment of responsibility as between the audit committee and
management. In such an instance, however, if the listed issuer provides
a recommendation or nomination regarding such responsibilities to
shareholders, the audit committee of the listed issuer, or body
performing similar functions, must be responsible for making the
recommendation or nomination.
2. The requirements in paragraphs (b)(2) through (b)(5), (c)(3)(v),
(c)(3)(vi) and Instruction 1 of this section do not conflict with any
legal or listing requirement in a listed issuer's home jurisdiction that
prohibits the full board of directors from delegating such
responsibilities to the listed issuer's audit committee or limits the
degree of such delegation. In that case, the audit committee, or body
performing similar functions, must be granted such responsibilities,
which can include advisory powers, with respect to such matters to the
extent permitted by law, including submitting nominations or
recommendations to the full board.
3. The requirements in paragraphs (b)(2) through (b)(5), (c)(3)(v)
and (c)(3)(vi) of this section do not conflict with any legal or listing
requirement in a listed issuer's home jurisdiction that vests such
responsibilities with a government entity or tribunal. In that case, the
audit committee, or body performing similar functions, must be granted
such responsibilities, which can include advisory powers, with respect
to such matters to the extent permitted by law.
4. For purposes of this section, the determination of a person's
beneficial ownership must be made in accordance with Sec. 240.13d-3.
[68 FR 18818, Apr. 16, 2003, as amended at 70 FR 1620, Jan. 7, 2005]
Adoption of Floor Trading Regulation (Rule 11a-1)
Sec. 240.11a-1 Regulation of floor trading.
(a) No member of a national securities exchange, while on the floor
of such exchange, shall initiate, directly or indirectly, any
transaction in any security admitted to trading on such exchange, for
any account in which such member has an interest, or for any such
account with respect to which such member has discretion as to the time
of execution, the choice of security to be bought or sold, the total
amount of any security to be bought or sold, or whether any such
transaction shall be one of purchase or sale.
(b) The provisions of paragraph (a) of this section shall not apply
to:
(1) Any transaction by a registered specialist in a security in
which he is so registered on such exchange;
(2) Any transaction for the account of an odd-lot dealer in a
security in which he is so registered on such exchange;
(3) Any stabilizing transaction effected in compliance with Sec.
242.104 of this chapter to facilitate a distribution of such security in
which such member is participating;
(4) Any bona fide arbitrage transaction;
(5) Any transaction made with the prior approval of a floor official
of such exchange to permit such member to contribute to the maintenance
of a fair and orderly market in such security, or any purchase or sale
to reverse any such transaction;
(6) Any transaction to offset a transaction made in error; or
(7) Any transaction effected in conformity with a plan designed to
eliminate floor trading activities which are not beneficial to the
market and which plan has been adopted by an exchange and declared
effective by the Commission. For the purpose of this rule, a plan filed
with the Commission by a national securities exchange shall not
[[Page 82]]
become effective unless the Commission, having due regard for the
maintenance of fair and orderly markets, for the public interest, and
for the protection of investors, declares the plan to be effective.
(c) For the purpose of this rule the term ``on the floor of such
exchange'' shall include the trading floor; the rooms, lobbies, and
other premises immediately adjacent thereto for use of members
generally; other rooms, lobbies and premises made available primarily
for use by members generally; and the telephone and other facilities in
any such place.
(d) Any national securities exchange may apply for an exemption from
the provisions of this rule in compliance with the provisions of section
11(c) of the Act.
(Sec. 11, 48 Stat. 891; 15 U.S.C. 78k)
[29 FR 7381, June 6, 1964, as amended at 62 FR 544, Jan. 3, 1997]
Note 1: The Commission finding that the floor trading plan of the
New York Stock Exchange filed on May 25, 1964 is designed to eliminate
floor trading activities not beneficial to the market hereby declares
such plan effective August 3, 1964 subject to suspension or termination
on sixty days written notice from the Commission, 29 FR 7381, June 6,
1964.
Note 2: The text of the Commission's action declaring effective the
amendments to the Floor Trading Plan of the American Stock Exchange (33
FR 1073, Jan. 27, 1968) is as follows:
The Securities and Exchange Commission acting pursuant to the
Securities Exchange Act of 1934, particularly sections 11(a) and 23(a)
thereof, and Rule 11a-1 (17 CFR 240.11a-1) under the Act, deeming it
necessary for the exercise of the functions vested in it, and having due
regard for the maintenance of fair and orderly markets, for the public
interest, and for the protection of investors, hereby declares the Floor
Trading Plan of the American Stock Exchange, as amended by amendments
filed on May 11, 1967, effective January 31, 1968. If at any time it
appears to the Commission to be necessary or appropriate in the public
interest, for the protection of investors, or for the maintenance of
fair and orderly markets, or that floor trading activities which are not
beneficial to the market have not been eliminated by the Floor Trading
Plan of the American Stock Exchange, the Commission may suspend or
terminate the effectiveness of the plan by sending at least 60 days
written notice to the American Stock Exchange. The American Stock
Exchange shall have the opportunity to submit any written data, facts,
arguments, or modifications in its plan within such 60-day period in
such form as the Commission deems appropriate under the circumstances.
The Commission has been informed that all persons subject to the Floor
Trading Plan of the American Stock Exchange, as amended, have had actual
notice thereof, and the Commission finds that notice and procedure
pursuant to section 4 of the Administrative Procedure Act (5 U.S.C.
section 553) are impracticable and unnecessary and that such Plan, as
amended, may be, and is hereby, declared effective on January 31, 1968.
Sec. 240.11a1-1(T) Transactions yielding priority, parity, and
precedence.
(a) A transaction effected on a national securities exchange for the
account of a member which meets the requirements of section
11(a)(1)(G)(i) of the Act shall be deemed, in accordance with the
requirements of section 11(a)(1)(G)(ii), to be not inconsistent with the
maintenance of fair and orderly markets and to yield priority, parity,
and precedence in execution to orders for the account of persons who are
not members or associated with members of the exchange if such
transaction is effected in compliance with each of the following
requirements:
(1) A member shall disclose that a bid or offer for its account is
for its account to any member with whom such bid or offer is placed or
to whom it is communicated, and any such member through whom that bid or
offer is communicated shall disclose to others participating in
effecting the order that it is for the account of a member.
(2) Immediately before executing the order, a member (other than the
specialist in such security) presenting any order for the account of a
member on the exchange shall clearly announce or otherwise indicate to
the specialist and to other members then present for the trading in such
security on the exchange that he is presenting an order for the account
of a member.
(3) Notwithstanding rules of priority, parity, and precedence
otherwise applicable, any member presenting for execution a bid or offer
for its own account or for the account of another member shall grant
priority to any bid or offer at the same price for the account of a
person who is not, or is not
[[Page 83]]
associated with, a member, irrespective of the size of any such bid or
offer or the time when entered.
(b) A member shall be deemed to meet the requirements of section
11(a)(1)(G)(i) of the Act if during its preceding fiscal year more than
50 percent of its gross revenues was derived from one or more of the
sources specified in that section. In addition to any revenue which
independently meets the requirements of section 11(a)(1)(G)(i), revenue
derived from any transaction specified in paragraph (A), (B), or (D) of
section 11(a)(1) of the Act or specified in 17 CFR 240.11a1-4(T) shall
be deemed to be revenue derived from one or more of the sources
specified in section 11(a)(1)(G)(i). A member may rely on a list of
members which are stated to meet the requirements of section
11(a)(1)(G)(i) if such list is prepared, and updated at least annually,
by the exchange. In preparing any such list, an exchange may rely on a
report which sets forth a statement of gross revenues of a member if
covered by a report of independent accountants for such member to the
effect that such report has been prepared in accordance with generally
accepted accounting principles.
(Secs. 2, 3, 6, 11, 11A, and 23, 89 Stat. 97, 104, 110, 111, 156 (15
U.S.C. 78b, 78c, 78f, 78k, 78k-1, 78w); secs. 2, 3, 11, 23, 48 Stat.
881, 882, 885, 891, 901, as amended)
[43 FR 11553, Mar. 17, 1978, as amended at 43 FR 18562, May 1, 1978; 44
FR 6093, Jan. 31, 1979]
Sec. 240.11a1-2 Transactions for certain accounts of associated persons
of members.
A transaction effected by a member of a national securities exchange
for the account of an associated person thereof shall be deemed to be of
a kind which is consistent with the purposes of section 11(a)(1) of the
Act, the protection of investors, and the maintenance of fair and
orderly markets if the transaction is effected:
(a) For the account of and for the benefit of an associated person,
if, assuming such transaction were for the account of a member, or
(b) For the account of an associated person but for the benefit of
an account carried by such associated person, if, assuming such account
were carried on the same basis by a member.
The member would have been permitted, under section 11(a) of the Act and
the other rules thereunder, to effect the transaction: Provided,
however, That a transaction may not be effected by a member for the
account of and for the benefit of an associated person under section
11(a)(1)(G) of the Act and Rule 11a1-1(T) thereunder unless the
associated person derived, during its preceding fiscal year, more than
50 percent of its gross revenues from one or more of the sources
specified in section 11(a)(1)(G)(i) of the Act.
(Secs. 2, 3, 4, 6, 7, 11, 18, 89 Stat. 97, 104, 110, 111, 121, 155 (15
U.S.C. 78b, 78c, 78f, 78k, 78k-1, 78o, 78w); secs. 2, 3, 10, 23, 48
Stat. 881, 882, 891, 901, as amended (15 U.S.C. 78j))
[43 FR 11553, Mar. 17, 1978; 43 FR 14451, Apr. 6, 1978]
Sec. 240.11a1-3(T) Bona fide hedge transactions in certain securities.
A bona fide hedge transaction effected on a national securities
exchange by a member for its own account or an account of an associated
person thereof and involving a long or short position in a security
entitling the holder to acquire or sell an equity security, and a long
or short position in one or more other securities entitling the holder
to acquire or sell such equity security, shall be deemed to be of a kind
which is consistent with the purposes of section 11(a)(1) of the Act,
the protection of investors, and the maintenance of fair and orderly
markets.
(Secs. 2, 3, 6, 11, 11A, and 23, 89 Stat. 97, 104, 110, 111, 156 (15
U.S.C. 78b, 78c, 78f, 78k, 78k-1, 78w); secs. 2, 3, 11, 23, 48 Stat.
881, 882, 885, 891, 901, as amended)
[44 FR 6093, Jan. 31, 1979]
Sec. 240.11a1-4(T) Bond transactions on national securities exchanges.
A transaction in a bond, note, debenture, or other form of
indebtedness effected on a national securities exchange by a member for
its own account or the account of an associated person thereof shall be
deemed to be of a kind which is consistent with the purposes of section
11(a)(1) of the Act, the protection of investors, and the
[[Page 84]]
maintenance of fair and orderly markets.
(Secs. 2, 3, 6, 10, 11, 11A, 15 and 23 of the Securities Exchange Act of
1934 (15 U.S.C. 78b, 78c, 78f, 78j, 78k, 78k-1, 78o, and 78w))
[43 FR 18562, May 1, 1978]
Sec. 240.11a1-5 Transactions by registered competitive market makers
and registered equity market makers.
Any transaction by a New York Stock Exchange registered competitive
market maker or an American Stock Exchange registered equity market
maker effected in compliance with their respective governing rules shall
be deemed to be of a kind which is consistent with the purposes of
section 11(a)(1) of the Act, the protection of investors, and the
maintenance of fair and orderly markets.
[46 FR 14889, Mar. 3, 1981]
Sec. 240.11a1-6 Transactions for certain accounts of OTC derivatives
dealers.
A transaction effected by a member of a national securities exchange
for the account of an OTC derivatives dealer that is an associated
person of that member shall be deemed to be of a kind that is consistent
with the purposes of section 11(a)(1) of the Act (15 U.S.C. 78k(a)(1)),
the protection of investors, and the maintenance of fair and orderly
markets if, assuming such transaction were for the account of a member,
the member would have been permitted, under section 11(a) of the Act and
the other rules thereunder (with the exception of Sec. 240.11a1-2), to
effect the transaction.
[63 FR 59396, Nov. 3, 1998]
Sec. 240.11a2-2(T) Transactions effected by exchange members through
other members.
(a) A member of a national securities exchange (the ``initiating
member'') may not effect a transaction on that exchange for its own
account, the account of an associated person, or an account with respect
to which it or an associated person thereof exercises investment
discretion unless:
(1) The transaction is of a kind described in paragraphs A through H
of section 11(a)(1) of the Act and is effected in accordance with
applicable rules and regulations thereunder; or
(2) The transaction is effected in compliance with each of the
following conditions:
(i) The transaction is executed on the floor, or through use of the
facilities, of the exchange by a member (the ``executing member'') which
is not an associated person of the initiating member;
(ii) The order for the transaction is transmitted from off the
exchange floor;
(iii) Neither the initiating member nor an associated person of the
initiating member participates in the execution of the transaction at
any time after the order for the transaction has been so transmitted;
and
(iv) In the case of a transaction effected for an account with
respect to which the initiating member or an associated person thereof
exercises investment discretion, neither the initiating member nor any
associated person thereof retains any compensation in connection with
effecting the transaction: Provided, however, That this condition shall
not apply to the extent that the person or persons authorized to
transact business for the account have expressly provided otherwise by
written contract referring to section 11(a) of the Act and this section
executed on or after March 15, 1978, by each of them and by such
exchange member or associated person exercising investment discretion.
(b) For purposes of this section, a member ``effects'' a securities
transaction when it performs any function in connection with the
processing of that transaction, including, but not limited to, (1)
transmission of an order for execution, (2) execution of the order, (3)
clearance and settlement of the transaction, and (4) arranging for the
performance of any such function.
(c) For purposes of this section, the term ``compensation in
connection with effecting the transaction'' refers to compensation
directly or indirectly received or calculated on a transaction-related
basis for the performance of any function involved in effecting a
securities transaction.
[[Page 85]]
(d) A member, or an associated person of a member, authorized by
written contract to retain compensation in connection with effecting
transactions pursuant to paragraph (a)(2)(iv) of this section shall
furnish at least annually to the person or persons authorized to
transact business for the account a statement setting forth the total
amount of all compensation retained by the member or any associated
person thereof in connection with effecting transactions for that
account during the period covered by the statement, which amount shall
be exclusive of all amounts paid to others during that period for
services rendered in effecting such transactions.
(e) A transaction effected in compliance with the requirements of
this section shall be deemed to be of a kind which is consistent with
the purposes of section 11(a)(1) of the Act, the protection of
investors, and the maintenance of fair and orderly markets.
(f) The provisions of this section shall not apply to transactions
by exchange members to which, by operation of section 11(a)(3) of the
Act, section 11(a)(1) of the Act is not effective.
(Secs. 2, 3, 4, 6, 7, 11, 18, 89 Stat. 97, 104, 110, 111, 121, 155 (15
U.S.C. 78b, 78c, 78f, 78k, 78k-1, 78o, 78w); secs. 2, 3, 10, 23, 48
Stat. 881, 882, 891, 901, as amended (15 U.S.C. 78j))
[43 FR 11554, Mar. 17, 1978, as amended at 43 FR 18562, May 1, 1978]
Adoption of Regulation on Conduct of Specialists
Sec. 240.11b-1 Regulation of specialists.
(a)(1) The rules of a national securities exchange may permit a
member of such exchange to register as a specialist and to act as a
dealer.
(2) The rules of a national securities exchange permitting a member
of such exchange to register as a specialist and to act as a dealer
shall include:
(i) Adequate minimum capital requirements in view of the markets for
securities on such exchange;
(ii) Requirements, as a condition of a specialist's registration,
that a specialist engage in a course of dealings for his own account to
assist in the maintenance, so far as practicable, of a fair and orderly
market, and that a finding by the exchange of any substantial or
continued failure by a specialist to engage in such a course of dealings
will result in the suspension or cancellation of such specialist's
registration in one or more of the securities in which such specialist
is registered;
(iii) Provisions restricting his dealings so far as practicable to
those reasonably necessary to permit him to maintain a fair and orderly
market or necessary to permit him to act as an odd-lot dealer;
(iv) Provisions stating the responsibilities of a specialist acting
as a broker in securities in which he is registered; and
(v) Procedures to provide for the effective and systematic
surveillance of the activities of specialists.
(b) If after appropriate notice and opportunity for hearing the
Commission finds that a member of a national securities exchange
registered with such exchange as a specialist in specified securities
has, for any account in which he, his member organization, or any
participant therein has any beneficial interest, direct or indirect,
effected transactions in such securities which were not part of a course
of dealings reasonably necessary to permit such specialist to maintain a
fair and orderly market, or to act as an odd-lot dealer, in the
securities in which he is registered and were not effected in a manner
consistent with the rules adopted by such exchange pursuant to paragraph
(a)(2)(iii) of this section, the Commission may by order direct such
exchange to cancel, or to suspend for such period as the Commission may
determine, such specialist's registration in one or more of the
securities in which such specialist is registered: Provided, however, If
such exchange has itself suspended or cancelled such specialist's
registration in one or more of the securities in which such specialist
is registered, no further sanction shall be imposed pursuant to this
paragraph (b) except in a case where the Commission finds substantial or
continued misconduct by a specialist: And provided, further, That the
provisions of this paragraph (b) shall not apply to a member of a
national securities exchange exempted pursuant to the provisions of
paragraph (d) of this section.
[[Page 86]]
(c) For the purposes of this section, the term rules of an exchange
shall mean its constitution, articles of incorporation, by-laws, or
rules or instruments corresponding thereto, whatever the name, and its
stated policies.
(d) Any national securities exchange may apply for an exemption from
the provisions of this section in compliance with the provisions of
section 11(c) of the Act.
(Sec. 11, 48 Stat. 891, 892; 15 U.S.C. 78k)
[29 FR 15863, Nov. 26, 1964, as amended at 46 FR 15135, Mar. 4, 1981]
Exemption of Certain Securities From Section 11(d)(1)
Sec. 240.11d1-1 Exemption of certain securities from section 11(d)(1).
A security shall be exempt from the provisions of section 11(d)(1)
with respect to any transaction by a broker and dealer who, directly or
indirectly extends or maintains or arranges for the extension or
maintenance of credit on the security to or for a customer if:
(a) The broker and dealer has not sold the security to the customer
or bought the security for the customer's account; or
(b) The security is acquired by the customer in exchange with the
issuer thereof for an outstanding security of the same issuer on which
credit was lawfully maintained for the customer at the time of the
exchange; or
(c) The customer is a broker or dealer or bank; or
(d) The security is acquired by the customer through the exercise of
a right evidenced by a warrant or certificate expiring within 90 days
after issuance, provided such right was originally issued to the
customer as a stockholder of the corporation issuing the security upon
which credit is to be extended, or as a stockholder of a company
distributing such security in order to effectuate the provisions of
section 11 of the Public Utility Holding Company Act of 1935. The right
shall be deemed to be issued to the customer as a stockholder if he
actually owned the stock giving rise to the right when such right
accrued, even though such stock was not registered in his name; and in
determining such fact the broker and dealer may rely upon a signed
statement of the customer which the broker and dealer accepts in good
faith; or
(e) Such broker and dealer would otherwise be subject to the
prohibition of section 11(d)(1) with respect to 50 percent or less of
all the securities of the same class which are outstanding or currently
being distributed, and such broker and dealer sold the security to the
customer or bought the security for the customer's account on a day when
he was not participating in the distribution of any new issue of such
security. A brokerdealer shall be deemed to be participating in a
distribution of a new issue if (1) he owns, directly or indirectly, any
undistributed security of such issue, or (2) he is engaged in any
stabilizing activities to facilitate a distribution of such issue, or
(3) he is a party to any syndicate agreement under which such
stabilizing activities are being or may be undertaken, or (4) he is a
party to an executory agreement to purchase or distribute such issue.
(Secs. 3, 11, 48 Stat. 882, 891; 15 U.S.C. 78c, 78k)
[13 FR 8184, Dec. 22, 1948]
Sec. 240.11d1-2 Exemption from section 11(d)(1) for certain investment
company securities held by broker-dealers as collateral in margin accounts.
Any securities issued by a registered open-end investment company or
unit investment trust as defined in the Investment Company Act of 1940
shall be exempted from the provisions of section 11(d)(1) with respect
to any transaction by a person who is a broker and a dealer who,
directly or indirectly, extends or maintains or arranges for the
extension or maintenance of credit on such security, provided such
security has been owned by the person to whom credit would be provided
for more than 30 days, or purchased by such person pursuant to a plan
for the automatic reinvestment of the dividends of such company or
trust.
(Secs. 2, 3, 11, and 23, Exchange Act, 15 U.S.C. 78b, 78c, 78k and 78w)
[49 FR 50174, Dec. 27, 1984]
[[Page 87]]
Sec. 240.11d2-1 Exemption from Section 11(d)(2) for certain
broker-dealers effecting transactions for customers security futures
products in futures accounts.
A broker or dealer registered pursuant to section 15(b)(1) of the
Act (15 U.S.C. 78o(b)(1)) that is also a futures commission merchant
registered pursuant to section 4f(a)(1) of the Commodity Exchange Act (7
U.S.C. 6f(a)(1)), to the extent that it effects transactions for
customers in security futures products in a futures account (as that
term is defined in Sec. 240.15c3-3(a)(15)), is exempt from section
11(d)(2) of the Act (15 U.S.C. 78k(d)(2)).
[67 FR 58313, Sept. 13, 2002]
Securities Exempted From Registration
Sec. 240.12a-4 Exemption of certain warrants from section 12(a).
(a) When used in this section, the following terms shall have the
meaning indicated unless the context otherwise requires:
(1) The term warrant means any warrant or certificate evidencing a
right to subscribe to or otherwise acquire another security, issued or
unissued.
(2) The term beneficiary security means a security to the holders of
which a warrant or right to subscribe to or otherwise acquire another
security is granted.
(3) The term subject security means a security which is the subject
of a warrant or right to subscribe to or otherwise acquire such
security.
(4) The term in the process of admission to dealing, in respect of a
specified security means that (i) an application has been filed pursuant
to section 12 (b) and (c) of the Act for the registration of such
security on a national securities exchange; or (ii) the Commission has
granted an application made pursuant to section 12(f) of the Act to
continue or extend unlisted trading privileges to such security on a
national securities exchange; or (iii) written notice has been filed
with the Commission by a national securities exchange to the effect that
such security has been approved for admission to dealing as a security
exempted from the operation of section 12(a) of the Act.
(b) Any issued or unissued warrant granted to the holders of a
security admitted to dealing on a national securities exchange, shall be
exempt from the operation of section 12(a) of the Act to the extent
necessary to render lawful the effecting of transactions therein on any
national securities exchange (i) on which the beneficiary security is
admitted to dealing or (ii) on which the subject security is admitted to
dealing or is in the process of admission to dealing, subject to the
following terms and conditions:
(1) Such warrant by its terms expires within 90 days after the
issuance thereof;
(2) A registration statement under the Securities Act of 1933 is in
effect as to such warrant and as to each subject security, or the
applicable terms of any exemption from such registration have been met
in respect to such warrant and each subject security; and
(3) Within five days after the exchange has taken official action to
admit such warrant to dealing, it shall notify the Commission of such
action.
(c) Notwithstanding paragraph (b) of this section, no exemption
pursuant to this section shall be available for transactions in any such
warrant on any exchange on which the beneficiary security is admitted to
dealing unless:
(1) Each subject security is admitted to dealing or is in process of
admission to dealing on a national securities exchange; or
(2) There is available from a registration statement and periodic
reports or other data filed by the issuer of the subject security,
pursuant to any act administered by the Commission, information
substantially equivalent to that available with respect to a security
listed and registered on a national securities exchange.
(d) Notwithstanding the foregoing, an unissued warrant shall not be
exempt pursuant to this section unless:
(1) Formal or official announcement has been made by the issuer
specifying (i) the terms upon which such warrant and each subject
security is to be issued, (ii) the date, if any, as of which the
security holders entitled to receive such warrant will be determined,
(iii) the approximate date of the issuance of such warrant, and (iv) the
approximate
[[Page 88]]
date of the issuance of each subject security; and,
(2) The members of the exchange are subject to rules which provide
that the performance of the contract to purchase and sell an unissued
warrant shall be conditioned upon the issuance of such warrant.
(e) The Commission may by order deny or revoke the exemption of a
warrant under this section, if, after appropriate notice and opportunity
for hearing to the issuer of such warrant and to the exchange or
exchanges on which such warrant is admitted to dealing as an exempted
security, it finds that:
(1) Any of the terms or conditions of this section have not been met
with respect to such exemption, or
(2) At any time during the period of such exemption transactions
have been effected on any such exchanges in such warrant which (i)
create or induce a false, misleading or artificial appearance of
activity, (ii) unduly or improperly influence the market price, or (iii)
make a price which does not reflect the true state of the market; or
(3) Any other facts exist which make such denial or revocation
necessary or appropriate in the public interest or for the protection of
investors.
(f) If it appears necessary or appropriate in the public interest or
for the protection of investors, the Commission may summarily suspend
the exemption of such warrant pending the determination by the
Commission whether such exemption shall be denied or revoked.
(g) Section 240.10b-1 shall be applicable to any warrant exempted by
this section.
(Secs. 3, 12, 48 Stat. 882, as amended, 892; 15 U.S.C. 78c, 78l)
[15 FR 3450, June 2, 1950, as amended at 18 FR 128, Jan. 7, 1953]
Sec. 240.12a-5 Temporary exemption of substituted or additional
securities.
(a)(1) Subject to the conditions of paragraph (a)(2) of this
section, whenever the holders of a security admitted to trading on a
national securities exchange (hereinafter called the original security)
obtain the right, by operation of law or otherwise, to acquire all or
any part of a class of another or substitute security of the same or
another issuer, or an additional amount of the original security, then:
(i) All or any part of the class of such other or substituted
security shall be temporarily exempted from the operation of section
12(a) to the extent necessary to render lawful transactions therein on
an issued or ``when-issued'' basis on any national securities exchange
on which the original, the other or the substituted security is lawfully
admitted to trading; and
(ii) The additional amount of the original security shall be
temporarily exempted from the operation of section 12(a) to the extent
necessary to render lawful transactions therein on a ``when-issued''
basis on any national securities exchange on which the original security
is lawfully admitted to trading.
(2) The exemptions provided by paragraph (a)(1) of this section
shall be available only if the following conditions are met:
(i) A registration statement is in effect under the Securities Act
of 1933 to the extent required as to the security which is the subject
of such exemption, or the terms of any applicable exemption from
registration under such act have been complied with, if required;
(ii) Any stockholder approval necessary to the issuance of the
security which is the subject of the exemption, has been obtained; and
(iii) All other necessary official action, other than the filing or
recording of charter amendments or other documents with the appropriate
State authorities, has been taken to authorize and assure the issuance
of the security which is the subject of such exemption.
(b) The exemption provided by this section shall terminate on the
earliest of the following dates:
(1) When registration of the exempt security on the exchange become
effective;
(2) When the exempt security is granted unlisted trading privileges
on the exchange;
(3) The close of business on the tenth day after (i) withdrawal of
an application for registration of the exempt security on the exchange;
(ii) withdrawal by the exchange of its certification of approval of the
exempt security for
[[Page 89]]
listing and registration; (iii) withdrawal of an application for
admission of the exempt security to unlisted trading privileges on the
exchange; or (iv) the sending to the exchange of notice of the entry of
an order by the Commission denying any application for admission of the
exempt security to unlisted trading privileges on the exchange;
(4) The close of business on the one hundred and twentieth day after
the date on which the exempt security was admitted by action of the
exchange to trading thereon as a security exempted from the operation of
section 12 (a) by this section, unless prior thereto an application for
registration of the exempt security or for admission of the exempt
security to unlisted trading privileges on the exchange has been filed.
(c) Notwithstanding paragraph (b) of this section, the Commission,
having due regard for the public interest and the protection of
investors, may at any time extend the period of exemption of any
security by this rule or may sooner terminate the exemption upon notice
to the exchange and to the issuer of the extension or termination
thereof.
(d) The Exchange shall file with the Commission a notification on
Form 26 \1\ promptly after taking action to admit any security to
trading under this section: Provided, however, That no notification need
be filed under this section concerning the admission or proposed
admission to trading of additional amounts of a class of security
admitted to trading on such exchange.
---------------------------------------------------------------------------
\1\ Copy filed with the Federal Register Division.
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(e) Section 240.10b-1 shall be applicable to all securities exempted
from the operation of section 12(a) of the act by this section.
(Secs. 3, 12, 48 Stat. 882, 892; 15 U.S.C. 78c (12), 78l)
[13 FR 8185, Dec. 22, 1948, as amended at 19 FR 669, Feb. 5, 1954; 20 FR
2081, Apr. 2, 1955; 53 FR 41206, Oct. 20, 1988]
Sec. 240.12a-6 Exemption of securities underlying certain options
from section 12(a).
(a) When used in this rule, the following terms shall have the
meanings indicated unless the context otherwise requires:
(1) The term option shall include any put, call, spread, straddle,
or other option or privilege of buying a security from or selling a
security to another without being bound to do so, but such term shall
not include any such option where the writer is: The issuer of the
security which may be purchased or sold upon exercise of the option, or
is a person that directly, or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with such issuer;
(2) The term underlying security means a security which relates to
or is the subject of an option.
(b) Any underlying security shall be exempt from the operation of
section 12(a) of the Act if all of the following terms and conditions
are met:
(1) The related option is duly listed and registered on a national
securities exchange;
(2) The only transactions on such exchange with respect to such
underlying securities consist of the delivery of and payment for such
underlying securities pursuant to the terms of such options relating to
the exercise thereof; and
(3) Such underlying security is (i) duly listed and registered on
another national securities exchange at the time the option is issued;
or (ii) duly quoted on the National Association of Securities Dealers
Automated Quotation System (``NASDAQ'') at the time the option is
issued.
(Secs. 3(a)(12); 48 Stat. 882, 84 Stat. 718, 1435, 1499 (15 U.S.C.
78(c)))
[38 FR 11449, May 8, 1973, as amended at 50 FR 20203, May 15, 1985]
Sec. 240.12a-7 Exemption of stock contained in standardized market
baskets from section 12(a) of the Act.
(a) Any component stock of a standardized market basket shall be
exempt from the registration requirement of section 12(a) of the Act,
solely for the purpose of inclusion in a standardized market basket,
provided that all of the following terms and conditions are met:
(1) The standardized market basket has been duly approved by the
Commission for listing on a national securities
[[Page 90]]
exchange pursuant to the requirements of section 19(b) of the Act; and
(2) The stock is an NMS stock as defined in Sec. 242.600 of this
chapter and is either:
(i) Listed and registered for trading on a national securities
exchange by the issuer or
(ii) Quoted on the National Association of Securities Dealers
Automated Quotation System;
(b) When used in this rule, the term standardized market basket
means a group of at least 100 stocks purchased or sold in a single
execution and at a single trading location with physical delivery and
transfer of ownership of each component stock resulting from such
execution.
[56 FR 28322, June 20, 1991, as amended at 70 FR 37618, June 29, 2005]
Sec. 240.12a-8 Exemption of depositary shares.
Depositary shares (as that term is defined in Sec. 240.12b-2)
registered on Form F-6 (Sec. 239.36 of this chapter), but not the
underlying deposited securities, shall be exempt from the operation of
section 12(a) of the Act (15 U.S.C. 78l(a)).
[62 FR 39766, July 24, 1997]
Sec. 240.12a-9 Exemption of standardized options from section 12(a)
of the Act.
The provisions of section 12(a) of the Act (15 U.S.C. 78l(a)) do not
apply in respect of any standardized option, as defined by section
240.9b-1(a)(4), issued by a clearing agency registered under section 17A
of the Act (15 U.S.C. 78q-1) and traded on a national securities
exchange registered pursuant to section 6(a) of the Act (15 U.S.C.
78f(a)).
[68 FR 192, Jan. 2, 2003]
Regulation 12B: Registration and Reporting
Source: Sections 240.12b-1 through 240.12b-36 appear at 13 FR 9321,
Dec. 31, 1948, unless otherwise noted.
ATTENTION ELECTRONIC FILERS
THIS REGULATION SHOULD BE READ IN CONJUNCTION WITH REGULATION S-T (PART
232 OF THIS CHAPTER), WHICH GOVERNS THE PREPARATION AND SUBMISSION OF
DOCUMENTS IN ELECTRONIC FORMAT. MANY PROVISIONS RELATING TO THE
PREPARATION AND SUBMISSION OF DOCUMENTS IN PAPER FORMAT CONTAINED IN
THIS REGULATION ARE SUPERSEDED BY THE PROVISIONS OF REGULATION S-T FOR
DOCUMENTS REQUIRED TO BE FILED IN ELECTRONIC FORMAT.
General
Sec. 240.12b-1 Scope of regulation.
The rules contained in this regulation shall govern all registration
statements pursuant to sections 12(b) and 12(g) of the Act and all
reports filed pursuant to sections 13 and 15(d) of the Act, including
all amendments to such statements and reports, except that any provision
in a form covering the same subject matter as any such rule shall be
controlling.
[47 FR 11464, Mar. 16, 1982]
Sec. 240.12b-2 Definitions.
Unless the context otherwise requires, the following terms, when
used in the rules contained in this regulation or in Regulation 13A or
15D or in the forms for statements and reports filed pursuant to
sections 12, 13 or 15(d) of the act, shall have the respective meanings
indicated in this rule:
Accelerated filer and large accelerated filer--(1) Accelerated
filer. The term accelerated filer means an issuer after it first meets
the following conditions as of the end of its fiscal year:
(i) The issuer had an aggregate worldwide market value of the voting
and non-voting common equity held by its non-affiliates of $75 million
or more, but less than $700 million, as of the last business day of the
issuer's most recently completed second fiscal quarter;
(ii) The issuer has been subject to the requirements of section
13(a) or 15(d) of the Act (15 U.S.C. 78m or 78o(d)) for a period of at
least twelve calendar months;
(iii) The issuer has filed at least one annual report pursuant to
section 13(a) or 15(d) of the Act; and
(iv) The issuer is not eligible to use Forms 10-KSB and 10-QSB
(Sec. 249.310b and Sec. 249.308b of this chapter) for its annual and
quarterly reports.
[[Page 91]]
(2) Large accelerated filer. The term large accelerated filer means
an issuer after it first meets the following conditions as of the end of
its fiscal year:
(i) The issuer had an aggregate worldwide market value of the voting
and non-voting common equity held by its non-affiliates of $700 million
or more, as of the last business day of the issuer's most recently
completed second fiscal quarter;
(ii) The issuer has been subject to the requirements of section
13(a) or 15(d) of the Act for a period of at least twelve calendar
months;
(iii) The issuer has filed at least one annual report pursuant to
section 13(a) or 15(d) of the Act; and
(iv) The issuer is not eligible to use Forms 10-KSB and 10-QSB for
its annual and quarterly reports.
(3) Entering and exiting accelerated filer and large accelerated
filer status.
(i) The determination at the end of the issuer's fiscal year for
whether a non-accelerated filer becomes an accelerated filer, or whether
a non-accelerated filer or accelerated filer becomes a large accelerated
filer, governs the deadlines for the annual report to be filed for that
fiscal year, the quarterly and annual reports to be filed for the
subsequent fiscal year and all annual and quarterly reports to be filed
thereafter while the issuer remains an accelerated filer or large
accelerated filer.
(ii) Once an issuer becomes an accelerated filer, it will remain an
accelerated filer unless the issuer determines at the end of a fiscal
year that the aggregate worldwide market value of the voting and non-
voting common equity held by non-affiliates of the issuer was less than
$50 million, as of the last business day of the issuer's most recently
completed second fiscal quarter. An issuer making this determination
becomes a non-accelerated filer. The issuer will not become an
accelerated filer again unless it subsequently meets the conditions in
paragraph (1) of this definition.
(iii) Once an issuer becomes a large accelerated filer, it will
remain a large accelerated filer unless the issuer determines at the end
of a fiscal year that the aggregate worldwide market value of the voting
and non-voting common equity held by non-affiliates of the issuer was
less than $500 million, as of the last business day of the issuer's most
recently completed second fiscal quarter. If the issuer's aggregate
worldwide market value was $50 million or more, but less than $500
million, as of the last business day of the issuer's most recently
completed second fiscal quarter, the issuer becomes an accelerated
filer. If the issuer's aggregate worldwide market value was less than
$50 million, as of the last business day of the issuer's most recently
completed second fiscal quarter, the issuer becomes a non-accelerated
filer. An issuer will not become a large accelerated filer again unless
it subsequently meets the conditions in paragraph (2) of this
definition.
(iv) The determination at the end of the issuer's fiscal year for
whether an accelerated filer becomes a non-accelerated filer, or a large
accelerated filer becomes an accelerated filer or a non-accelerated
filer, governs the deadlines for the annual report to be filed for that
fiscal year, the quarterly and annual reports to be filed for the
subsequent fiscal year and all annual and quarterly reports to be filed
thereafter while the issuer remains an accelerated filer or non-
accelerated filer.
Note to paragraphs (1), (2) and (3): The aggregate worldwide market
value of the issuer's outstanding voting and non-voting common equity
shall be computed by use of the price at which the common equity was
last sold, or the average of the bid and asked prices of such common
equity, in the principal market for such common equity.
Affiliate. An ``affiliate'' of, or a person ``affiliated'' with, a
specified person, is a person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under
common control with, the person specified.
Amount. The term ``amount,'' when used in regard to securities,
means the principal amount if relating to evidences of indebtedness, the
number of shares if relating to shares, and the number of units if
relating to any other kind of security.
Associate. The term ``associate'' used to indicate a relationship
with any person, means (1) any corporation or organization (other than
the registrant or a
[[Page 92]]
majority-owned subsidiary of the registrant) of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner
of 10 percent or more of any class of equity securities, (2) any trust
or other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a similar
fiduciary capacity, and (3) any relative or spouse of such person, or
any relative of such spouse, who has the same home as such person or who
is a director or officer of the registrant or any of its parents or
subsidiaries.
Business combination related shell company: The term business
combination related shell company means a shell company (as defined in
Sec. 240.12b-2) that is:
(1) Formed by an entity that is not a shell company solely for the
purpose of changing the corporate domicile of that entity solely within
the United States; or
(2) Formed by an entity that is not a shell company solely for the
purpose of completing a business combination transaction (as defined in
Sec. 230.165(f) of this chapter) among one or more entities other than
the shell company, none of which is a shell company.
Certified. The term ``certified,'' when used in regard to financial
statements, means examined and reported upon with an opinion expressed
by an independent public or certified public accountant.
Charter. The term ``charter'' includes articles of incorporation,
declarations of trust, articles of association or partnership, or any
similar instrument, as amended, effecting (either with or without filing
with any governmental agency) the organization or creation of an
incorporated or unincorporated person.
Common equity. The term ``common equity'' means any class of common
stock or an equivalent interest, including but not limited to a unit of
beneficial interest in a trust or a limited partnership interest.
Control. The term ``control'' (including the terms ``controlling,''
``controlled by'' and ``under common control with'') means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person, whether through
the ownership of voting securities, by contract, or otherwise.
Depositary share. The term ``depositary share'' means a security,
evidenced by an American Depositary Receipt, that represents a foreign
security or a multiple of or fraction thereof deposited with a
depositary.
Employee. The term ``employee'' does not include a director,
trustee, or officer.
Fiscal year. The term ``fiscal year'' means the annual accounting
period or, if no closing date has been adopted, the calendar year ending
on December 31.
Majority-owned subsidiary. The term ``majority-owned subsidiary''
means a subsidiary more than 50 percent of whose outstanding securities
representing the right, other than as affected by events of default, to
vote for the election of directors, is owned by the subsidiary's parent
and/or one or more of the parent's other majority-owned subsidiaries.
Managing underwriter. The term ``managing underwriter'' includes an
underwriter (or underwriters) who, by contract or otherwise, deals with
the registrant; organizes the selling effort; receives some benefit
directly or indirectly in which all other underwriters similarly
situated do not share in proportion to their respective interests in the
underwriting; or represents any other underwriters in such matters as
maintaining the records of the distribution, arranging the allotments of
securities offered or arranging for appropriate stabilization
activities, if any.
Material. The term ``material,'' when used to qualify a requirement
for the furnishing of information as to any subject, limits the
information required to those matters to which there is a substantial
likelihood that a reasonable investor would attach importance in
determining whether to buy or sell the securities registered.
Parent. A ``parent'' of a specified person is an affiliate
controlling such person directly, or indirectly through one or more
intermediaries.
Predecessor. The term ``predecessor'' means a person the major
portion of
[[Page 93]]
the business and assets of which another person acquired in a single
succession or in a series of related successions in each of which the
acquiring person acquired the major portion of the business and assets
of the acquired person.
Previously filed or reported. The terms ``previously filed'' and
``previously reported'' mean previously filed with, or reported in, a
statement under section 12, a report under section 13 or 15(d), a
definitive proxy statement or information statement under section 14 of
the act, or a registration statement under the Securities Act of 1933:
Provided, That information contained in any such document shall be
deemed to have been previously filed with, or reported to, an exchange
only if such document is filed with such exchange.
Principal underwriter. The term ``principal underwriter'' means an
underwriter in privity of contract with the issuer of the securities as
to which he is underwriter.
Promoter. (1) The term ``promoter'' includes:
(i) Any person who, acting alone or in conjunction with one or more
other persons, directly or indirectly takes initiative in founding and
organizing the business or enterprise of an issuer; or
(ii) Any person who, in connection with the founding and organizing
of the business or enterprise of an issuer, directly or indirectly
receives in consideration of services or property, or both services and
property, 10 percent or more of any class of securities of the issuer or
10 percent or more of the proceeds from the sale of any class of such
securities. However, a person who receives such securities or proceeds
either solely as underwriting commissions or solely in consideration of
property shall not be deemed a promoter within the meaning of this
paragraph if such person does not otherwise take part in founding and
organizing the enterprise.
(2) All persons coming within the definition of ``promoter'' in
paragraph (1) of this definition may be referred to as ``founders'' or
``organizers'' or by another term provided that such term is reasonably
descriptive of those persons' activities with respect to the issuer.
Prospectus. Unless otherwise specified or the context otherwise
requires, the term ``prospectus'' means a prospectus meeting the
requirements of section 10(a) of the Securities Act of 1933 as amended.
Registrant. The term ``registrant'' means an issuer of securities
with respect to which a registration statement or report is to be filed.
Registration statement. The term ``registration statement'' or
``statement'', when used with reference to registration pursuant to
section 12 of the act, includes both an application for registration of
securities on a national securities exchange pursuant to section 12(b)
of the act and a registration statement filed pursuant to section 12(g)
of the act.
Share. The term ``share'' means a share of stock in a corporation or
unit of interest in an unincorporated person.
Shell company: The term shell company means a registrant, other than
an asset-backed issuer as defined in Item 1101(b) of Regulation AB
(Sec. 229.1101(b) of this chapter), that has:
(1) No or nominal operations; and
(2) Either:
(i) No or nominal assets;
(ii) Assets consisting solely of cash and cash equivalents; or
(iii) Assets consisting of any amount of cash and cash equivalents
and nominal other assets.
Note: For purposes of this definition, the determination of a
registrant's assets (including cash and cash equivalents) is based
solely on the amount of assets that would be reflected on the
registrant's balance sheet prepared in accordance with generally
accepted accounting principles on the date of that determination.
Significant subsidiary. The term ``significant subsidiary'' means a
subsidiary, including its subsidiaries, which meets any of the following
conditions:
(1) The registrant's and its other subsidiaries' investments in and
advances to the subsidiary exceed 10 percent of the total assets of the
registrant and its subsidiaries consolidated as of the
[[Page 94]]
end of the most recently completed fiscal year (for a proposed business
combination to be accounted for as a pooling of interests, this
condition is also met when the number of common shares exchanged or to
be exchanged by the registrant exceeds 10 percent of its total common
shares outstanding at the date the combination is initiated); or
(2) The registrant's and its other subsidiaries' proportionate share
of the total assets (after intercompany eliminations) of the subsidiary
exceeds 10 percent of the total assets of the registrants and its
subsidiaries consolidated as of the end of the most recently completed
fiscal year; or
(3) The registrant's and its other subsidiaries' equity in the
income from continuing operations before income taxes, extraordinary
items and cumulative effect of a change in accounting principle of the
subsidiary exceeds 10 percent of such income of the registrant and its
subsidiaries consolidated for the most recently completed fiscal year.
Computational note: For purposes of making the prescribed income
test the following guidance should be applied:
1. When a loss has been incurred by either the parent and its
subsidiaries consolidated or the tested subsidiary, but not both, the
equity in the income or loss of the tested subsidiary should be excluded
from the income of the registrant and its subsidiaries consolidated for
purposes of the computation.
2. If income of the registrant and its subsidiaries consolidated for
the most recent fiscal year is at least 10 percent lower than the
average of the income for the last five fiscal years, such average
income should be substituted for purposes of the computation. Any loss
years should be omitted for purposes of computing average income.
Small Business Issuer. The term ``small business issuer'' means an
entity that meets the following criteria:
(1) Has revenues of less than $25,000,000;
(2) Is a U.S. or Canadian issuer;
(3) Is not an investment company and is not an asset-backed issuer
(as defined in Sec. 229.1101 of this chapter); and
(4) If a majority owned subsidiary, the parent corporation is also a
small business issuer.
Provided however, that an entity is not a small business issuer if
it has a public float (the aggregate market value of the issuer's
outstanding voting and non-voting common equity held by non-affiliates)
of $25,000,000 or more.
Note: The public float of a reporting company shall be computed by
use of the price at which the stock was last sold, or the average of the
bid and asked prices of such stock, on a date within 60 days prior to
the end of its most recent fiscal year. The public float of a company
filing an initial registration statement under the Exchange Act shall be
determined as of a date within 60 days of the date the registration
statement is filed. In the case of an initial public offering of
securities, public float shall be computed on the basis of the number of
shares outstanding prior to the offering and the estimated public
offering price of the securities.
Subsidiary. A ``subsidiary'' of a specified person is an affiliate
controlled by such person directly, or indirectly through one or more
intermediaries. (See also ``majority-owned subsidiary,'' ``significant
subsidiary,'' and ``totally-held subsidiary.'')
Succession: The term succession means the direct acquisition of the
assets comprising a going business, whether by merger, consolidation,
purchase, or other direct transfer; or the acquisition of control of a
shell company in a transaction required to be reported on Form 8-K
(Sec. 249.308 of this chapter) in compliance with Item 5.01 of that
Form or on Form 20-F (Sec. 249.220f of this chapter) in compliance with
Rule 13a-19 (Sec. 240.13a-19) or Rule 15d-19 (Sec. 240.15d-19). Except
for an acquisition of control of a shell company, the term does not
include the acquisition of control of a business unless followed by the
direct acquisition of its assets. The terms succeed and successor have
meanings correlative to the foregoing.
Totally held subsidiary. The term ``totally held subsidiary'' means
a subsidiary (1) substantially all of whose outstanding securities are
owned by its parent and/or the parent's other totally held subsidiaries,
and (2) which is not indebted to any person other than its parent and/or
the parent's other totally held subsidiaries in an amount which is
material in relation to the particular subsidiary, excepting
indebtedness incurred in the ordinary course of business which is not
overdue and which
[[Page 95]]
matures within one year from the date of its creation, whether evidenced
by securities or not.
Voting securities. The term ``voting securities'' means securities
the holders of which are presently entitled to vote for the election of
directors.
Wholly-owned subsidiary. The term ``wholly-owned subsidiary'' means
a subsidiary substantially all of whose outstanding voting securities
are owned by its parent and/or the parent's other wholly-owned
subsidiaries.
[13 FR 9321, Dec. 31, 1948, as amended at 19 FR 6730, Oct. 30, 1954; 20
FR 8285, Nov. 4, 1955; 30 FR 2022, Feb. 13, 1965; 47 FR 11464, Mar. 16,
1982; 47 FR 29841, July 9, 1982; 47 FR 54780, Dec. 6, 1982; 48 FR 12350,
Mar. 24, 1983; 50 FR 25216, June 18, 1985; 57 FR 36494, Aug. 13, 1992;
62 FR 26389, May 14, 1997; 67 FR 58505, Sept. 16, 2002; 70 FR 1620, Jan.
7, 2005; 70 FR 42247, July 21, 2005; 70 FR 76641, Dec. 27, 2005]
Sec. 240.12b-3 Title of securities.
Wherever the title of securities is required to be stated there
shall be given such information as will indicate the type and general
character of the securities, including the following:
(a) In the case of shares, the par or stated value, if any; the rate
of dividends, if fixed, and whether cumulative or noncumulative; a brief
indication of the preference, if any; and if convertible, a statement to
that effect.
(b) In the case of funded debt, the rate of interest; the date of
maturity, or if the issue matures serially, a brief indication of the
serial maturities, such as ``maturing serially from 1950 to 1960''; if
the payment of principal or interest is contingent, an appropriate
indication of such contingency; a brief indication of the priority of
the issue; and if convertible, a statement to that effect.
(c) In the case of any other kind of security, appropriate
information of comparable character.
Sec. 240.12b-4 Supplemental information.
The Commission or its staff may, where it is deemed appropriate,
request supplemental information concerning the registrant, a
registration statement or a periodic or other report under the Act. This
information shall not be required to be filed with or deemed part of the
registration statement or report. The information shall be returned to
the registrant upon request, provided that:
(a) Such request is made at the time such information is furnished
to the staff;
(b) The return of such information is consistent with the protection
of investors; and
(c) The return of such information is consistent with the provisions
of the Freedom of Information Act (5 U.S.C. 552).
[47 FR 11465, Mar. 16, 1982]
Sec. 240.12b-5 Determination of affiliates of banks.
In determining whether a person is an ``affiliate'' or ``parent'' of
a bank or whether a bank is a ``subsidiary'' or ``majority-owner
subsidiary'' of a person within the meaning of those terms as defined in
Sec. 240.12b-2, voting securities of the bank held by a corporation all
of the stock of which is directly owned by the United States Government
shall not be taken into consideration.
Sec. 240.12b-6 When securities are deemed to be registered.
A class of securities with respect to which a registration statement
has been filed pursuant to section 12 of the act shall be deemed to be
registered for the purposes of sections 13, 14, 15(d) and 16 of the act
and the rules and regulations thereunder only when such statement has
become effective as provided in section 12, and securities of said class
shall not be subject to sections 13, 14 and 16 of the act until such
statement has become effective as provided in section 12.
(Secs. 3, 14, 16, 48 Stat. 882, 895, 896, sec. 3(d), 78 Stat. 568; 15
U.S.C. 78c, 78n, 78p, 78l)
[30 FR 482, Jan. 14, 1965]
Sec. 240.12b-7 [Reserved]
Formal Requirements
Sec. 240.12b-10 Requirements as to proper form.
Every statement or report shall be on the form prescribed therefor
by the Commission, as in effect on the date of filing. Any statement or
report shall be deemed to be filed on the proper form
[[Page 96]]
unless objection to the form is made by the Commission within thirty
days after the date of filing.
(Secs. 4, 16, 19, 24, 48 Stat. 77, 896, 85, as amended, 901; 15 U.S.C.
77d, 78p, 77s, 78x)
[30 FR 2022, Feb. 13, 1965]
Sec. 240.12b-11 Number of copies; signatures; binding.
(a) Except as provided in a particular form, three complete copies
of each statement or report, including exhibits and all other papers and
documents filed as a part thereof, shall be filed with the Commission.
At least one complete copy of each statement shall be filed with each
exchange on which the securities covered thereby are to be registered.
At least one complete copy of each report under section 13 of the Act
shall be filed with each exchange on which the registrant has securities
registered.
(b) At least one copy of each statement or report filed with the
Commission and one copy thereof filed with each exchange shall be signed
in the manner prescribed by the appropriate form.
(c) Each copy of a statement or report filed with the Commission or
with an exchange shall be bound in one or more parts. Copies filed with
the Commission shall be bound without stiff covers. The statement or
report shall be bound on the left side in such a manner as to leave the
reading matter legible.
(d) Signatures. Where the Act or the rules, forms, reports or
schedules thereunder, including paragraph (b) of this section, require a
document filed with or furnished to the Commission to be signed, such
document shall be manually signed, or signed using either typed
signatures or duplicated or facsimile versions of manual signatures.
Where typed, duplicated or facsimile signatures are used, each signatory
to the filing shall manually sign a signature page or other document
authenticating, acknowledging or otherwise adopting his or her signature
that appears in the filing. Such document shall be executed before or at
the time the filing is made and shall be retained by the filer for a
period of five years. Upon request, the filer shall furnish to the
Commission or its staff a copy of any or all documents retained pursuant
to this section.
[47 FR 11465, Mar. 16, 1982, as amended at 60 FR 26622, May 17, 1995; 61
FR 30403, June 14, 1996]
Sec. 240.12b-12 Requirements as to paper, printing and language.
(a) Statements and reports shall be filed on good quality, unglazed
white paper, no larger than 8\1/2\x11 inches in size, insofar as
practicable. To the extent that the reduction of larger documents would
render them illegible, such documents may be filed on paper larger than
8\1/2\x11 inches in size.
(b) The statement or report and, insofar as practicable, all papers
and documents filed as a part thereof, shall be printed, lithographed,
mimeographed, or typewritten. However, the statement or report or any
portion thereof may be prepared by any similar process which, in the
opinion of the Commission, produces copies suitable for a permanent
record and microfilming. Irrespective of the process used, all copies of
any such material shall be clear, easily readable and suitable for
repeated photocopying. Debits in credit categories and credits in debit
categories shall be designated so as to be clearly distinguishable as
such on photocopies.
(c) The body of all printed statements and reports and all notes to
financial statements and other tabular data included therein shall be in
roman type at least as large and as legible as 10-point modern type.
However, to the extent necessary for convenient presentation, financial
statements and other tabular data, including tabular data in notes, may
be in roman type at least as large and as legible as 8-point modern
type. All such type shall be leaded at least 2 points.
(d)(1) All Exchange Act filings and submissions must be in the
English language, except as otherwise provided by this section. If a
filing or submission requires the inclusion of a document that is in a
foreign language, a party must submit instead a fair and accurate
English translation of the entire foreign language document, except as
provided by paragraph (d)(3) of this section.
[[Page 97]]
(2) If a filing or submission subject to review by the Division of
Corporation Finance requires the inclusion of a foreign language
document as an exhibit or attachment, a party must submit a fair and
accurate English translation of the foreign language document if
consisting of any of the following, or an amendment of any of the
following:
(i) Articles of incorporation, memoranda of association, bylaws, and
other comparable documents, whether original or restated;
(ii) Instruments defining the rights of security holders, including
indentures qualified or to be qualified under the Trust Indenture Act of
1939;
(iii) Voting agreements, including voting trust agreements;
(iv) Contracts to which directors, officers, promoters, voting
trustees or security holders named in a registration statement, report
or other document are parties;
(v) Contracts upon which a filer's business is substantially
dependent;
(vi) Audited annual and interim consolidated financial information;
and
(vii) Any document that is or will be the subject of a confidential
treatment request under Sec. 240.24b-2 or Sec. 230.406 of this
chapter.
(3)(i) A party may submit an English summary instead of an English
translation of a foreign language document as an exhibit or attachment
to a filing or submission subject to review by the Division of
Corporation Finance, as long as:
(A) The foreign language document does not consist of any of the
subject matter enumerated in paragraph (d)(2) of this section; or
(B) The applicable form permits the use of an English summary.
(ii) Any English summary submitted under paragraph (d)(3) of this
section must:
(A) Fairly and accurately summarize the terms of each material
provision of the foreign language document; and
(B) Fairly and accurately describe the terms that have been omitted
or abridged.
(4) When submitting an English summary or English translation of a
foreign language document under this section, a party must identify the
submission as either an English summary or English translation. A party
may submit a copy of the unabridged foreign language document when
including an English summary or English translation of a foreign
language document in a filing or submission. A party must provide a copy
of any foreign language document upon the request of Commission staff.
(5) A foreign government or its political subdivision must provide a
fair and accurate English translation of its latest annual budget
submitted as Exhibit B to Form 18 (Sec. 249.218 of this chapter) or
Exhibit (c) to Form 18-K (Sec. 249.318 of this chapter) only if one is
available. If no English translation is available, a filer must provide
a copy of the foreign language version of its latest annual budget as an
exhibit.
(6) A Canadian issuer may file an exhibit, attachment or other part
of a Form 40-F registration statement or annual report (Sec. 249.240f
of this chapter), Schedule 13E-4F (Sec. 240.13e-102), Schedule 14D-1F
(Sec. 240.14d-102), or Schedule 14D-9F (Sec. 240.14d-103), that
contains text in both French and English if the issuer included the
French text to comply with the requirements of the Canadian securities
administrator or other Canadian authority and, for an electronic filing,
if the filing is an HTML document, as defined in Regulation S-T Rule 11
(17 CFR 232.11).
(e) Where a statement or report is distributed to investors through
an electronic medium, issuers may satisfy legibility requirements
applicable to printed documents, such as paper size and type size and
font, by presenting all required information in a format readily
communicated to investors.
[47 FR 11466, Mar. 16, 1982, as amended at 47 FR 58238, Dec. 30, 1982;
61 FR 24656, May 15, 1996; 67 FR 36704, May 24, 2002]
Sec. 240.12b-13 Preparation of statement or report.
The statement or report shall contain the numbers and captions of
all items of the appropriate form, but the text of the items may be
omitted provided the answers thereto are so prepared as to indicate to
the reader the coverage of the items without the necessity of his
referring to the text of
[[Page 98]]
the items or instructions thereto. However, where any item requires
information to be given in tabular form, it shall be given in
substantially the tabular form specified in the item. All instructions,
whether appearing under the items of the form or elsewhere therein, are
to be omitted. Unless expressly provided otherwise, if any item is
inapplicable or the answer thereto is in the negative, an appropriate
statement to that effect shall be made.
(Secs. 4, 16, 19, 24, 48 Stat. 77, 896, 85, as amended, 901; 15 U.S.C.
77d, 78p, 77s, 78x)
[30 FR 2023, Feb. 13, 1965]
Sec. 240.12b-14 Riders; inserts.
Riders shall not be used. If the statement or report is typed on a
printed form, and the space provided for the answer to any given item is
insufficient, reference shall be made in such space to a full insert
page or pages on which the item number and caption and the complete
answer are given.
(Secs. 4, 16, 19, 24, 48 Stat. 77, 896, 85, as amended, 901; 15 U.S.C.
77d, 78p, 77s, 78x)
[30 FR 2023, Feb. 13, 1965]
Sec. 240.12b-15 Amendments.
All amendments must be filed under cover of the form amended, marked
with the letter ``A'' to designate the document as an amendment, e.g.,
``10-K/A,'' and in compliance with pertinent requirements applicable to
statements and reports. Amendments filed pursuant to this section must
set forth the complete text of each item as amended. Amendments must be
numbered sequentially and be filed separately for each statement or
report amended. Amendments to a statement may be filed either before or
after registration becomes effective. Amendments must be signed on
behalf of the registrant by a duly authorized representative of the
registrant. An amendment to any report required to include the
certifications as specified in Sec. 240.13a-14(a) or Sec. 240.15d-
14(a) must include new certifications by each principal executive and
principal financial officer of the registrant, and an amendment to any
report required to be accompanied by the certifications as specified in
Sec. 240.13a-14(b) or Sec. 240.15d-14(b) must be accompanied by new
certifications by each principal executive and principal financial
officer of the registrant. An amendment to any report required to
include the certifications as specified in Sec. 240.13a-14(d) or Sec.
240.15d-14(d) must include a new certification by an individual
specified in Sec. 240.13a-14(e) or Sec. 240.15d-14(e), as applicable.
The requirements of the form being amended will govern the number of
copies to be filed in connection with a paper format amendment.
Electronic filers satisfy the provisions dictating the number of copies
by filing one copy of the amendment in electronic format. See Sec.
232.309 of this chapter (Rule 309 of Regulation S-T).
[68 FR 36665, June 18, 2003, as amended at 70 FR 1620, Jan. 7, 2005]
General Requirements as to Contents
Sec. 240.12b-20 Additional information.
In addition to the information expressly required to be included in
a statement or report, there shall be added such further material
information, if any, as may be necessary to make the required
statements, in the light of the circumstances under which they are made
not misleading.
(Secs. 4, 16, 19, 24, 48 Stat. 77, 896, 85, as amended, 901; 15 U.S.C.
77d, 78p, 77s, 78x)
[30 FR 2023, Feb. 13, 1965]
Sec. 240.12b-21 Information unknown or not available.
Information required need be given only insofar as it is known or
reasonably available to the registrant. If any required information is
unknown and not reasonably available to the registrant, either because
the obtaining thereof would involve unreasonable effort or expense, or
because it rests peculiarly within the knowledge of another person not
affiliated with the registrant, the information may be omitted, subject
to the following conditions.
(a) The registrant shall give such information on the subject as it
possesses or can acquire without unreasonable effort or expense,
together with the sources thereof.
[[Page 99]]
(b) The registrant shall include a statement either showing that
unreasonable effort or expense would be involved or indicating the
absence of any affiliation with the person within whose knowledge the
information rests and stating the result of a request made to such
person for the information.
Sec. 240.12b-22 Disclaimer of control.
If the existence of control is open to reasonable doubt in any
instance, the registrant may disclaim the existence of control and any
admission thereof; in such case, however, the registrant shall state the
material facts pertinent to the possible existence of control.
Sec. 240.12b-23 Incorporation by reference.
(a) Except for information filed as an exhibit which is covered by
Rule 12b-32 (17 CFR 240.12b-32), information may be incorporated by
reference in answer, or partial answer, to any item of a registration
statement or report subject to the following provisions:
(1) Financial statements incorporated by reference shall satisfy the
requirements of the form or report in which they are incorporated.
Financial statements or other financial data required to be given in
comparative form for two or more fiscal years or periods shall not be
incorporated by reference unless the material incorporated by reference
includes the entire period for which the comparative data is given;
(2) Information in any part of the registration statement or report
may be incorporated by reference in answer, or partial answer, to any
other item of the registration statement or report; and
(3) Copies of any information or financial statement incorporated
into a registration statement or report by reference, or copies of the
pertinent pages of the document containing such information or
statement, shall be filed as an exhibit to the statement or report,
except that:
(i) A proxy or information statement incorporated by reference in
response to Part III of Form 10-K and Form 10-KSB (17 CFR 249.310 and
249.310b);
(ii) A form of prospectus filed pursuant to 17 CFR 230.424(b)
incorporated by reference in response to Item 1 of Form 8-A (17 CFR
249.208a); and
(iii) Information filed on Form 8-K (17 CFR 249.308) need not be
filed as an exhibit.
(b) Any incorporation by reference of matter pursuant to this
section shall be subject to the provisions of Sec. 228.10(f) and Sec.
229.10(d) of this chapter restricting incorporation by reference of
documents which incorporate by reference other information. Material
incorporated by reference shall be clearly identified in the reference
by page, paragraph, caption or otherwise. Where only certain pages of a
document are incorporated by reference and filed as an exhibit, the
document from which the material is taken shall be clearly identified in
the reference. An express statement that the specified matter is
incorporated by reference shall be made at the particular place in the
statement or report where the information is required. Matter shall not
be incorporated by reference in any case where such incorporation would
render the statement or report incomplete, unclear or confusing.
[47 FR 11466, Mar. 16, 1982, as amended at 57 FR 48977, Oct. 29, 1992;
60 FR 32825, June 23, 1995; 69 FR 15618, Mar. 25, 2004]
Sec. 240.12b-24 [Reserved]
Sec. 240.12b-25 Notification of inability to timely file all or any
required portion of a Form 10-K, 10-KSB, 20-F, 11-K, N-SAR, N-CSR,
10-Q, 10-QSB or 10-D.
(a) If all or any required portion of an annual or transition report
on Form 10-K, 10-KSB, 20-F or 11-K (17 CFR 249.310, 249.310b, 249.220f
or 249.311), a quarterly or transition report on Form 10-Q or 10-QSB (17
CFR 249.308a or 249.308b), or a distribution report on Form 10-D (17 CFR
249.312) required to be filed pursuant to section 13 or 15(d) of the Act
(15 U.S.C. 78m or 78o(d)) and rules thereunder, or if all or any
required portion of a semi-annual, annual or transition report on Form
N-CSR (17 CFR 249.331; 17 CFR 274.128) or Form N-SAR (17 CFR 249.330; 17
CFR 274.101) required to be filed pursuant to section 13 or 15(d) of the
Act or section 30 of the Investment Company Act of 1940 (15 U.S.C. 80a-
29) and the rules thereunder,
[[Page 100]]
is not filed within the time period prescribed for such report, the
registrant, no later than one business day after the due date for such
report, shall file a Form 12b-25 (17 CFR 249.322) with the Commission
which shall contain disclosure of its inability to file the report
timely and the reasons therefor in reasonable detail.
(b) With respect to any report or portion of any report described in
paragraph (a) of this section which is not timely filed because the
registrant is unable to do so without unreasonable effort or expense,
such report shall be deemed to be filed on the prescribed due date for
such report if:
(1) The registrant files the Form 12b-25 in compliance with
paragraph (a) of this section and, when applicable, furnishes the
exhibit required by paragraph (c) of this section;
(2) The registrant represents in the Form 12b-25 that:
(i) The reason(s) causing the inability to file timely could not be
eliminated by the registrant without unreasonable effort or expense; and
(ii) The subject annual report, semi-annual report or transition
report on Form 10-K, 10-KSB, 20-F, 11-K, N-SAR, or N-CSR, or portion
thereof, will be filed no later than the fifteenth calendar day
following the prescribed due date; or the subject quarterly report or
transition report on Form 10-Q or 10-QSB or distribution report on Form
10-D, or portion thereof, will be filed no later than the fifth calendar
day following the prescribed due date; and
(3) The report/portion thereof is actually filed within the period
specified by paragraph (b)(2)(ii) of this section.
(c) If paragraph (b) of this section is applicable and the reason
the subject report/portion thereof cannot be filed timely without
unreasonable effort or expense relates to the inability of any person,
other than the registrant, to furnish any required opinion, report or
certification, the Form 12b-25 shall have attached as an exhibit a
statement signed by such person stating the specific reasons why such
person is unable to furnish the required opinion, report or
certification on or before the date such report must be filed.
(d) Notwithstanding paragraph (b) of this section, a registrant will
not be eligible to use any registration statement form under the
Securities Act of 1933 the use of which is predicated on timely filed
reports until the subject report is actually filed pursuant to paragraph
(b)(3) of this section.
(e) If a Form 12b-25 filed pursuant to paragraph (a) of this sectin
relates only to a portion of a subject report, the registrant shall:
(1) File the balance of such report and indicate on the cover page
thereof which disclosure items are omitted; and
(2) Include, on the upper right corner of the amendment to the
report which includes the previously omitted information, the following
statement:
The following items were the subject of a Form 12b-25 and are
included herein: (List Item Numbers)
(f) The provisions of this section shall not apply to financial
statements to be filed by amendment to a form 10-K as provided for by
paragraph (a) of Sec. 210.3-09 or schedules to be filed by amendment in
accordance with General Instruction A to form 10-K.
(g) Electronic filings. The provisions of this section shall not
apply to reports required to be filed in electronic format if the sole
reason the report is not filed within the time period prescribed is that
the filer is unable to file the report in electronic format. Filers
unable to submit a report in electronic format within the time period
prescribed solely due to difficulties with electronic filing should
comply with either Rule 201 or 202 of Regulation S-T (Sec. 232.201 and
Sec. 232.202 of this chapter), or apply for an adjustment of filing
date pursuant to Rule 13(b) of Regulation S-T (Sec. 232.13(c) of this
chapter).
[45 FR 23652, Apr. 8, 1980, as amended at 50 FR 1449, Jan. 11, 1985; 50
FR 2957, Jan. 23, 1985; 54 FR 10316, Mar. 13, 1989; 58 FR 14683, Mar.
18, 1993; 58 FR 21349, Apr. 21, 1993; 59 FR 67764, Dec. 30, 1994; 68 FR
5364, Feb. 3, 2003; 70 FR 1620, Jan. 7, 2005]
Exhibits
Sec. 240.12b-30 Additional exhibits.
The registrant may file such exhibits as it may desire, in addition
to those required by the appropriate form. Such
[[Page 101]]
exhibits shall be so marked as to indicate clearly the subject matters
to which they refer.
Sec. 240.12b-31 Omission of substantially identical documents.
In any case where two or more indentures, contracts, franchises, or
other documents required to be filed as exhibits are substantially
identical in all material respects except as to the parties thereto, the
dates of execution, or other details, the registrant need file a copy of
only one of such documents, with a schedule identifying the other
documents omitted and setting forth the material details in which such
documents differ from the document of which a copy is filed. The
Commission may at any time in its discretion require the filing of
copies of any documents so omitted.
Sec. 240.12b-32 Incorporation of exhibits by reference.
(a) Any document or part thereof filed with the Commission pursuant
to any act administered by the Commission may, subject to Sec.
228.10(f) and Sec. 229.10(d) of this chapter be incorporated by
reference as an exhibit to any statement or report filed with the
Commission by the same or any other person. Any document or part thereof
filed with an exchange pursuant to the act may be incorporated by
reference as an exhibit to any statement or report filed with the
exchange by the same or any other person.
(b) If any modification has occurred in the text of any document
incorporated by reference since the filing thereof, the registrant shall
file with the reference a statement containing the text of any such
modification and the date thereof.
(Secs. 4, 16, 19, 24, 48 Stat. 77, 896, 85, as amended, 901; 15 U.S.C.
77d, 78p, 77s, 78x)
[13 FR 9321, Dec. 31, 1948, as amended at 30 FR 2023, Feb. 13, 1965; 60
FR 32825, June 23, 1995]
Sec. 240.12b-33 Annual reports to other Federal agencies.
Notwithstanding any rule or other requirement to the contrary,
whenever copies of an annual report by a registrant to any other Federal
agency are required or permitted to be filed as an exhibit to an
application or report filed by such registrant with the Commission or
with a securities exchange, only one copy of such annual report need be
filed with the Commission and one copy thereof with each such exchange,
provided appropriate reference to such copy is made in each copy of the
application or report filed with the Commission or with such exchange.
[18 FR 1441, Mar. 13, 1953]
Special Provisions
Sec. 240.12b-35 [Reserved]
Sec. 240.12b-36 Use of financial statements filed under other acts.
Where copies of certified financial statements filed under other
acts administered by the Commission are filed with a statement or
report, the accountant's certificate shall be manually signed or
manually signed copies of the certificate shall be filed with the
financial statements. Where such financial statements are incorporated
by reference in a statement or report, the written consent of the
accountant to such incorporation by reference shall be filed with the
statement or report. Such consent shall be dated and signed manually.
(Secs. 4, 16, 19, 24, 48 Stat. 77, 896, 85, as amended, 901; 15 U.S.C.
77d, 78p, 77s, 78x)
[30 FR 2023, Feb. 13, 1965]
Sec. 240.12b-37 Satisfaction of filing requirements.
With regard to issuers eligible to rely on Release No. 34-45589
(March 18, 2002) or Release No. IC-25463 (March 18, 2002) (each of which
may be viewed on the Commission's website at www.sec.gov), filings made
in accordance with the provisions of those Releases shall satisfy the
issuer's requirement to make such a filing under Section 13(a), 14 or
15(d) of the Act (15 U.S.C. 77m(a), 78n or 78o(d)), as applicable, and
the Commission's rules and regulations thereunder.
[67 FR 13537, Mar. 22, 2002]
[[Page 102]]
Certification by Exchanges and Effectiveness of Registration
Source: Sections 240.12d1-1 through 240.12d-6 appear at 19 FR 670,
Feb. 5, 1954, unless otherwise noted.
Sec. 240.12d1-1 Registration effective as to class or series.
(a) An application filed pursuant to section 12 (b) and (c) of the
act for registration of a security on a national securities exchange
shall be deemed to apply for registration of the entire class of such
security. Registration shall become effective, as provided in section
12(d) of the act, (1) as to the shares or amounts of such class then
issued, and (2), without further application for registration, upon
issuance as to additional shares or amounts of such class then or
thereafter authorized.
(b) This section shall apply to classes of securities of which a
specified number of shares or amounts was registered or registered upon
notice of issuance, and to applications for registration filed, prior to
the close of business on January 28, 1954, as well as to classes
registered, or applications filed, thereafter.
(c) This section shall not affect the right of a national securities
exchange to require the issuer of a registered security to file
documents with or pay fees to the exchange in connection with the
modification of such security or the issuance of additional shares or
amounts.
(d) If a class of security is issuable in two or more series with
different terms, each such series shall be deemed a separate class for
the purposes of this section.
(Sec. 12, 48 Stat. 892, as amended; 15 U.S.C. 78l)
Sec. 240.12d1-2 Effectiveness of registration.
(a) A request for acceleration of the effective date of registration
pursuant to section 12(d) of the act and Sec. 240.12d1-1 shall be made
in writing by either the registrant, the exchange, or both and shall
briefly describe the reasons therefor.
(b) A registration statement on Form 8-A (17 CFR 249.208a) for the
registration of a class of securities under Section 12(b) of the Act (15
U.S.C. 78l(b)) shall become effective:
(1) If a class of securities is not concurrently being registered
under the Securities Act of 1933 (``Securities Act''), upon the later of
receipt by the Commission of certification from the national securities
exchange or the filing of the Form 8-A with the Commission; or
(2) If a class of securities is concurrently being registered under
the Securities Act, upon the later of the filing of the Form 8-A with
the Commission, receipt by the Commission of certification from the
national securities exchange listed on the Form 8-A or effectiveness of
the Securities Act registration statement relating to the class of
securities.
(c) A registration statement on Form 8-A (17 CFR 249.208a) for the
registration of a class of securities under Section 12(g) of the Act (15
U.S.C. 78l(g)) shall become effective:
(1) If a class of securities is not concurrently being registered
under the Securities Act, upon the filing of the Form 8-A with the
Commission; or
(2) If class of securities is concurrently being registered under
the Securities Act, upon the later of the filing of the Form 8-A with
the Commission or the effectiveness of the Securities Act registration
statement relating to the class of securities.
(Sec. 12, 48 Stat. 892, as amended; 15 U.S.C. 78l)
[19 FR 670, Feb. 5, 1954, as amended at 59 FR 55347, Nov. 7, 1994; 62 FR
39766, July 24, 1997]
Sec. 240.12d1-3 Requirements as to certification.
(a) Certification that a security has been approved by an exchange
for listing and registration pursuant to section 12(d) of the act and
Sec. 240.12d1-1 shall be made by the governing committee or other
corresponding authority of the exchange.
(b) The certification shall specify (1) the approval of the exchange
for listing and registration; (2) the title of the security so approved;
(3) the date of filing with the exchange of the application for
registration and of any amendments thereto; and (4) any conditions
[[Page 103]]
imposed on such certification. The exchange shall promptly notify the
Commission of the partial or complete satisfaction of any such
conditions.
(c) The certification may be made by telegram but in such case shall
be confirmed in writing. All certifications in writing and all
amendments thereto shall be filed with the Commission in duplicate and
at least one copy shall be manually signed by the appropriate exchange
authority.
(Sec. 12, 48 Stat. 892, as amended; 15 U.S.C. 78l)
Sec. 240.12d1-4 Date of receipt of certification by Commission.
The date of receipt by the Commission of the certification approving
a security for listing and registration shall be the date on which the
certification is actually received by the Commission or the date on
which the application for registration to which the certification
relates is actually received by the Commission, whichever date is later.
(Sec. 12, 48 Stat. 892, as amended; 15 U.S.C. 78l)
Sec. 240.12d1-5 Operation of certification on subsequent amendments.
If an amendment to the application for registration of a security is
filed with the exchange and with the Commission after the receipt by the
Commission of the certification of the exchange approving the security
for listing and registration, the certification, unless withdrawn, shall
be deemed made with reference to the application as amended.
(Sec. 12, 48 Stat. 892, as amended; 15 U.S.C. 78l)
Sec. 240.12d1-6 Withdrawal of certification.
An exchange may, by notice to the Commission, withdraw its
certification prior to the time that the registration to which it
relates first becomes effective pursuant to Sec. 240.12d1-1.
(Sec. 12, 48 Stat. 892, as amended; 15 U.S.C. 78l)
Suspension of Trading, Withdrawal, and Striking From Listing and
Registration
Sec. 240.12d2-1 Suspension of trading.
(a) A national securities exchange may suspend from trading a
security listed and registered thereon in accordance with its rules.
Such exchange shall promptly notify the Commission of any such
suspension, the effective date thereof, and the reasons therefor.
(b) Any such suspension may be continued until such time as it shall
appear to the Commission that such suspension is designed to evade the
provisions of section 12(d) and the rules and regulations thereunder
relating to the withdrawal and striking of a security from listing and
registration. During the continuance of such suspension the exchange
shall notify the Commission promptly of any change in the reasons for
the suspension. Upon the restoration to trading of any security
suspended under this rule, the exchange shall notify the Commission
promptly of the effective date thereof.
(c) Suspension of trading shall not terminate the registration of
any security.
(Sec. 12, 48 Stat. 892, as amended; 15 U.S.C. 78l)
[28 FR 1506, Feb. 16, 1963]
Sec. 240.12d2-2 Removal from listing and registration.
Preliminary Notes: 1. The filing of the Form 25 (Sec. 249.25 of this
chapter) by an issuer relates solely to the withdrawal of a class of
securities from listing on a national securities exchange and/or from
registration under section 12(b) of the Act (15 U.S.C. 78l(b)), and
shall not affect its obligation to be registered under section 12(g) of
the Act and/or reporting obligations under section 15(d) of the Act (15
U.S.C. 78o(d)).
2. Implementation. The rules of each national securities exchange
must be designed to meet the requirements of this section and must be
operative no later than April 24, 2006. Each national securities
exchange must submit to the Commission a proposed rule change that
complies with section 19(b) of the Act (15 U.S.C. 78s) and Rule 19b-4
(17 CFR 240.19b-4) thereunder, and this section no later than October
24, 2005.
(a) A national securities exchange must file with the Commission an
application on Form 25 (17 CFR 249.25) to strike a class of securities
from listing
[[Page 104]]
on a national securities exchange and/or registration under section
12(b) of the Act within a reasonable time after the national securities
exchange is reliably informed that any of the following conditions exist
with respect to such a security:
(1) The entire class of the security has been called for redemption,
maturity or retirement; appropriate notice thereof has been given; funds
sufficient for the payment of all such securities have been deposited
with an agency authorized to make such payments; and such funds have
been made available to security holders.
(2) The entire class of the security has been redeemed or paid at
maturity or retirement.
(3) The instruments representing the securities comprising the
entire class have come to evidence, by operation of law or otherwise,
other securities in substitution therefor and represent no other right,
except, if such be the fact, the right to receive an immediate cash
payment (the right of dissenters to receive the appraised or fair value
of their holdings shall not prevent the application of this provision).
(4) All rights pertaining to the entire class of the security have
been extinguished; provided, however, that where such an event occurs as
a result of an order of a court or other governmental authority, the
order shall be final, all applicable appeal periods shall have expired,
and no appeals shall be pending.
Effective Date: Such an application shall be deemed to be granted
and shall become effective at the opening of business on such date as
the exchange shall specify in said application, but not less than 10
days following the date on which said application is filed with the
Commission; Provided, however, That in the event removal is being
effected under paragraph (a)(3) of this section and the exchange has
admitted or intends to admit a successor security to trading under the
temporary exemption provided for by Sec. 240.12a-5, such date shall not
be earlier than the date on which the successor security is removed from
its exempt status.
(b)(1) In cases not provided for in paragraph (a) of this section, a
national securities exchange may file an application on Form 25 to
strike a class of securities from listing and/or withdraw the
registration of such securities, in accordance with its rules, if the
rules of such exchange, at a minimum, provide for:
(i) Notice to the issuer of the exchange's decision to delist its
securities;
(ii) An opportunity for appeal to the national securities exchange's
board of directors, or to a committee designated by the board; and
(iii) Public notice of the national securities exchange's final
determination to remove the security from listing and/or registration,
by issuing a press release and posting notice on its Web site. Public
notice under this paragraph shall be disseminated no fewer than 10 days
before the delisting becomes effective pursuant to paragraph (d)(1) of
this section, and must remain posted on its Web site until the delisting
is effective.
(2) A national securities exchange must promptly deliver a copy of
the application on Form 25 to the issuer.
(c)(1) The issuer of a class of securities listed on a national
securities exchange and/or registered under section 12(b) of the Act may
file an application on Form 25 to notify the Commission of its
withdrawal of such securities from listing on such national securities
exchange and its intention to withdraw the securities from registration
under section 12(b) of the Act.
(2) An issuer filing Form 25 under this paragraph must satisfy the
requirements in paragraph (c)(2) of this section and represent on the
Form 25 that such requirements have been met:
(i) The issuer must comply with all applicable laws in effect in the
state in which it is incorporated and with the national securities
exchange's rules governing an issuer's voluntary withdrawal of a class
of securities from listing and/or registration.
(ii) No fewer than 10 days before the issuer files an application on
Form 25 with the Commission, the issuer must provide written notice to
the national securities exchange of its determination to withdraw the
class of securities from listing and/or registration on such exchange.
Such written notice must set forth a description of the security
involved, together with a statement of all material facts relating to
the reasons for withdrawal from listing and/or registration.
[[Page 105]]
(iii) Contemporaneous with providing written notice to the exchange
of its intent to withdraw a class of securities from listing and/or
registration, the issuer must publish notice of such intention, along
with its reasons for such withdrawal, via a press release and, if it has
a publicly accessible Web site, posting such notice on that Web site.
Any notice provided on an issuer's Web site under this paragraph shall
remain available until the delisting on Form 25 has become effective
pursuant to paragraph (d)(1) of this section. If the issuer has not
arranged for listing and/or registration on another national securities
exchange or for quotation of its security in a quotation medium (as
defined in Sec. 240.15c2-11), then the press release and posting on the
Web site must contain this information.
(3) A national securities exchange, that receives, pursuant to
paragraph (c)(2)(ii) of this section, written notice from an issuer that
such issuer has determined to withdraw a class of securities from
listing and/or registration on such exchange, must provide notice on its
Web site of the issuer's intent to delist and/or withdraw from
registration its securities by the next business day. Such notice must
remain posted on the exchange's Web site until the delisting on Form 25
is effective pursuant to paragraph (d)(1) of this section.
(d)(1) An application on Form 25 to strike a class of securities
from listing on a national securities exchange will be effective 10 days
after Form 25 is filed with the Commission.
(2) An application on Form 25 to withdraw the registration of a
class of securities under section 12(b) of the Act will be effective 90
days, or such shorter period as the Commission may determine, after
filing with the Commission.
(3) Notwithstanding paragraphs (d)(1) and (d)(2) of this section,
the Commission may, by written notice to the exchange and issuer,
postpone the effectiveness of an application to delist and/or to
deregister to determine whether the application on Form 25 to strike the
security from registration under section 12(b) of the Act has been made
in accordance with the rules of the exchange, or what terms should be
imposed by the Commission for the protection of investors.
(4) Notwithstanding paragraph (d)(2) of this section, whenever the
Commission commences a proceeding against an issuer under section 12 of
the Act prior to the withdrawal of the registration of a class of
securities, such security will remain registered under section 12(b) of
the Act until the final decision of such proceeding or until the
Commission otherwise determines to suspend the effective date of, or
revoke, the registration of a class of securities.
(5) An issuer's duty to file any reports under section 13(a) of the
Act (15 U.S.C. 78m(a)) and the rules and regulations thereunder solely
because of such security's registration under section 12(b) of the Act
will be suspended upon the effective date for the delisting pursuant to
paragraph (d)(1) of this section. If, following the effective date of
delisting on Form 25, the Commission, an exchange, or an issuer delays
the withdrawal of a security's registration under section 12(b) of the
Act, an issuer shall, within 60 days of such delay, file any reports
that would have been required under section 13(a) of the Act and the
rules and regulations thereunder, had the Form 25 not been filed. The
issuer also shall timely file any subsequent reports required under
section 13(a) of the Act for the duration of the delay.
(6) An issuer whose reporting responsibilities under section 13(a)
of the Act are suspended for a class of securities under paragraph
(d)(5) of this section is, nevertheless, required to file any reports
that an issuer with such a class of securities registered under section
12 of the Act would be required to file under section 13(a) of the Act
if such class of securities:
(i) Is registered under section 12(g) of the Act; or
(ii) Would be registered, or would be required to be registered,
under section 12(g) of the Act but for the exemption from registration
under section 12(g) of the Act provided by section 12(g)(2)(A) of the
Act.
(7)(i) An issuer whose reporting responsibilities under section
13(a) of the Act are suspended under paragraph (d)(5) of this section
is, nevertheless,
[[Page 106]]
required to file any reports that would be required under section 15(d)
of the Act but for the fact that the reporting obligations are:
(A) Suspended for a class of securities under paragraph (d)(5) of
this section; and
(B) Suspended, terminated, or otherwise absent under section 12(g)
of the Act.
(ii) The reporting responsibilities of an issuer under section 15(d)
of the Act shall continue until the issuer is required to file reports
under section 13(a) of the Act or the issuer's reporting
responsibilities under section 15(d) of the Act are otherwise suspended.
(8) In the event removal is being effected under paragraph (a)(3) of
this section and the national securities exchange has admitted or
intends to admit a successor security to trading under the temporary
exemption provided for by Sec. 240.12a-5, the effective date of the
Form 25, as set forth in paragraph (d)(1) of this section, shall not be
earlier than the date the successor security is removed from its exempt
status.
(e) The following are exempt from section 12(d) of the Act and the
provisions of this section:
(1) Any standardized option, as defined in Sec. 240.9b-1, that is:
(i) Issued by a clearing agency registered under section 17A of the
Act (15 U.S.C. 78q-1); and
(ii) Traded on a national securities exchange registered pursuant to
section 6(a) of the Act (15 U.S.C. 78f(a)); and
(2) Any security futures product that is:
(i) Traded on a national securities exchange registered under
section 6(a) of the Act or on a national securities association
registered pursuant to section 15A(a) of the Act (15 U.S.C. 78o-3(a));
and
(ii) Cleared by a clearing agency registered as a clearing agency
pursuant to section 17A of the Act or is exempt from registration under
section 17A(b)(7) of the Act.
[28 FR 1506, Feb. 16, 1963, as amended at 70 FR 42468, July 22, 2005]
Unlisted Trading
Sec. 240.12f-1 Applications for permission to reinstate unlisted
trading privileges.
(a) An application to reinstate unlisted trading privileges may be
made to the Commission by any national securities exchange for the
extension of unlisted trading privileges to any security for which such
unlisted trading privileges have been suspended by the Commission,
pursuant to section 12(f)(2)(A) of the Act (15 U.S.C. 78l(2)(A)). One
copy of such application, executed by a duly authorized officer of the
exchange, shall be filed and shall set forth:
(1) Name of issuer;
(2) Title of security;
(3) The name of each national securities exchange, if any, on which
such security is listed or admitted to unlisted trading privileges;
(4) Whether transaction information concerning such security is
reported pursuant to an effective transaction reporting plan
contemplated by Sec. 242.601 of this chapter;
(5) The date of the Commission's suspension of unlisted trading
privileges in the security on the exchange;
(6) Any other information which is deemed pertinent to the question
of whether the reinstatement of unlisted trading privileges in such
security is consistent with the maintenance of fair and orderly markets
and the protection of investors; and
(7) That a copy of the instant application has been mailed, or
otherwise personally provided, to the issuer of the securities for which
unlisted trading privileges are sought and to each exchange listed in
item (3) of this section.
[44 FR 75134, Dec. 19, 1979, as amended at 45 FR 12390, Feb. 26, 1980;
45 FR 36076, May 29, 1980; 60 FR 20896, Apr. 28, 1995; 70 FR 37618, June
29, 2005]
Sec. 240.12f-2 Extending unlisted trading privileges to a security
that is the subject of an initial public offering.
(a) General provision. A national securities exchange may extend
unlisted trading privileges to a subject security when at least one
transaction in the subject security has been effected on
[[Page 107]]
the national securities exchange upon which the security is listed and
the transaction has been reported pursuant to an effective transaction
reporting plan, as defined in Sec. 242.600 of this chapter.
(b) The extension of unlisted trading privileges pursuant to this
section shall be subject to all the provisions set forth in Section
12(f) of the Act (15 U.S.C. 78l(f)), as amended, and any rule or
regulation promulgated thereunder, or which may be promulgated
thereunder while the extension is in effect.
(c) Definitions. For the purposes of this section:
(1) The term subject security shall mean a security that is the
subject of an initial public offering, as that term is defined in
section 12(f)(1)(G)(i) of the Act (15 U.S.C. 78l(f)(1)(G)(i)), and
(2) An initial public offering commences at such time as is
described in section 12(f)(1)(G)(ii) of the Act (15 U.S.C.
78l(f)(1)(G)(ii)).
[60 FR 20896, Apr. 28, 1995, as amended at 65 FR 53565, Sept. 5, 2000;
70 FR 37618, June 29, 2005]
Sec. 240.12f-3 Termination or suspension of unlisted trading privileges.
(a) The issuer of any security for which unlisted trading privileges
on any exchange have been continued or extended, or any broker or dealer
who makes or creates a market for such security, or any other person
having a bona fide interest in the question of termination or suspension
of such unlisted trading privileges, may make application to the
Commission for the termination or suspension of such unlisted trading
privileges. One duly executed copy of such application shall be filed,
and it shall contain the following information:
(1) Name and address of applicant;
(2) A brief statement of the applicant's interest in the question of
termination or suspension of such unlisted trading privileges;
(3) Title of security;
(4) Names of issuer;
(5) Amount of such security issued and outstanding (number of shares
of stock or principal amount of bonds), stating source of information;
(6) Annual volume of public trading in such security (number of
shares of stock or principal amount of bonds) on such exchange for each
of the three calendar years immediately preceding the date of such
application, and monthly volume of trading in such security for each of
the twelve calendar months immediately preceding the date of such
application;
(7) Price range on such exchange for each of the twelve calendar
months immediately preceding the date of such application; and
(8) A brief statement of the information in the applicant's
possession, and the source thereof, with respect to (i) the extent of
public trading in such security on such exchange, and (ii) the character
of trading in such security on such exchange; and
(9) A brief statement that a copy of the instant application has
been mailed, or otherwise personally provided, to the exchange from
which the suspension or termination of unlisted trading privileges is
sought, and to any other exchange on which such security is listed or
traded pursuant to unlisted trading privileges.
(b) Unlisted trading privileges in any security on any national
securities exchange may be suspended or terminated by such exchange in
accordance with its rules.
(Secs. 12(f) and 23, 15 U.S.C. 78l and 78w)
[20 FR 6702, Sept. 13, 1955, as amended at 44 FR 75135, Dec. 19, 1979;
45 FR 36076, May 29, 1980; 60 FR 20896, Apr. 28, 1995]
Sec. 240.12f-4 Exemption of securities admitted to unlisted trading
privileges from sections 13, 14 and 16.
(a) Any security for which unlisted trading privileges on any
national securities exchange have been continued or extended pursuant to
section 12(f) of the Act shall be exempt from section 13 of the Act
unless (1) such security or another security of the same issuer is
listed and registered on a national securities exchange or registered
pursuant to section 12(g) of the Act, or (2) such issuer would be
required to file information, documents and reports pursuant to section
15(d) of the Act but for the fact that securities of the issuer are
deemed to be ``registered on a national securities exchange'' within the
meaning of section 12(f)(6) of the Act.
[[Page 108]]
(b) Any security for which unlisted trading privileges on any
national securities exchange have been continued or extended pursuant to
section 12(f) of the Act shall be exempt from section 14 of the Act
unless such security is also listed and registered on a national
securities exchange or registered pursuant to section 12(g) of the Act.
(c)(1) Any equity security for which unlisted trading privileges on
any national securities exchange have been continued or extended
pursuant to section 12(f) of the Act shall be exempt from section 16 of
the act unless such security or another equity security of the same
issuer is listed and registered on a national securities exchange or
registered pursuant to section 12(g) of the Act.
(2) Any equity security for which unlisted trading privileges on any
national securities exchange have been continued or extended pursuant to
section 12(f) of the Act and which is not listed and registered on any
other such exchange or registered pursuant to section 12(g) of the Act
shall be exempt from section 16 of the Act insofar as that section would
otherwise apply to any person who is directly or indirectly the
beneficial owner of more than 10 percent of such security, unless
another equity security of the issuer of such unlisted security is so
listed or registered and such beneficial owner is a director or officer
of such issuer or directly or indirectly the beneficial owner of more
than 10 percent of any such listed security.
(d) Any reference in this section to a security registered pursuant
to section 12(g) of the Act shall include, and any reference to a
security not so registered shall exclude, any security as to which a
registration statement pursuant to such section is at the time required
to be effective.
(Sec. 3, 78 Stat. 565, 15 U.S.C. 78l)
[30 FR 482, Jan. 14, 1965]
Sec. 240.12f-5 Exchange rules for securities to which unlisted trading
privileges are extended.
A national securities exchange shall not extend unlisted trading
privileges to any security unless the national securities exchange has
in effect a rule or rules providing for transactions in the class or
type of security to which the exchange extends unlisted trading
privileges.
[60 FR 20896, Apr. 28, 1995]
Sec. 240.12f-6 [Reserved]
Extensions and Temporary Exemptions; Definitions
Sec. 240.12g-1 Exemption from section 12(g).
An issuer shall be exempt from the requirement to register any class
of equity securities pursuant to section 12(g)(1) if on the last day of
its most recent fiscal year the issuer had total assets not exceeding
$10 million and, with respect to a foreign private issuer, such
securities were not quoted in an automated inter-dealer quotation
system.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48
Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 1, 79
Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13, 15(d), 23(a), 48
Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat. 1375, 1377, 1379; sec.
203(a), 49 Stat. 704; sec. 202, 68 Stat. 686; secs. 3, 4, 6, 78 Stat.
565-574; secs. 1, 2, 82 Stat. 454; sec. 28(c), 84 Stat. 1435; secs. 1,
2, 84 Stat. 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89
Stat. 117, 118, 119, 155; sec. 308(b), 90 Stat. 57; secs. 202, 203, 204,
91 Stat. 1494, 1498, 1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l,
78m, 78o(d), 78w(a))
[48 FR 46739, Oct. 14, 1983, as amended at 51 FR 25362, July 14, 1986;
61 FR 21356, May 9, 1996]
Sec. 240.12g-2 Securities deemed to be registered pursuant to section
12(g)(1) upon termination of exemption pursuant to section 12(g)(2) (A) or (B).
Any class of securities which would have been required to be
registered pursuant to section 12(g)(1) of the Act except for the fact
that it was exempt from such registration by section 12(g)(2)(A) because
it was listed and registered on a national securities exchange, or by
section 12(g)(2)(B) because it was issued by an investment company
registered pursuant to section 8 of the Investment Company Act of 1940,
shall upon the termination of the listing and registration of such class
or the termination of the registration of such company and without the
filing of an additional registration
[[Page 109]]
statement be deemed to be registered pursuant to said section 12(g)(1)
if at the time of such termination (a) the issuer of such class of
securities has elected to be regulated as a business development company
pursuant to sections 55 through 65 of the Investment Company Act of 1940
and such election has not been withdrawn, or (b) securities of the class
are not exempt from such registration pursuant to section 12 or rules
thereunder delete ``or'' and all securities of such class are held of
record by 300 or more persons.
[47 FR 17052, Apr. 21, 1982]
Sec. 240.12g-3 Registration of securities of successor issuers under
section 12(b) or 12(g).
(a) Where in connection with a succession by merger, consolidation,
exchange of securities, acquisition of assets or otherwise, securities
of an issuer that are not already registered pursuant to section 12 of
the Act (15 U.S.C. 78l) are issued to the holders of any class of
securities of another issuer that is registered pursuant to either
section 12 (b) or (g) of the Act (15 U.S.C. 78l (b) or (g)), the class
of securities so issued shall be deemed to be registered under the same
paragraph of section 12 of the Act unless upon consummation of the
succession:
(1) Such class is exempt from such registration other than by Sec.
240.12g3-2;
(2) All securities of such class are held of record by less than 300
persons; or
(3) The securities issued in connection with the succession were
registered on Form F-8 or Form F-80 (Sec. 239.38 or Sec. 239.41 of
this chapter) and following succession the successor would not be
required to register such class of securities under section 12 of the
Act (15 U.S.C. 78l) but for this section.
(b) Where in connection with a succession by merger, consolidation,
exchange of securities, acquisition of assets or otherwise, securities
of an issuer that are not already registered pursuant to section 12 of
the Act (15 U.S.C. 78l) are issued to the holders of any class of
securities of another issuer that is required to file a registration
statement pursuant to either section 12(b) or (g) of the Act (15 U.S.C.
78l(b) or (g)) but has not yet done so, the duty to file such statement
shall be deemed to have been assumed by the issuer of the class of
securities so issued. The successor issuer shall file a registration
statement pursuant to the same paragraph of section 12 of the Act with
respect to such class within the period of time the predecessor issuer
would have been required to file such a statement unless upon
consummation of the succession:
(1) Such class is exempt from such registration other than by Sec.
240.12g3-2;
(2) All securities of such class are held of record by less than 300
persons; or
(3) The securities issued in connection with the succession were
registered on Form F-8 or Form F-80 (Sec. 239.38 or Sec. 239.41 of
this chapter) and following the succession the successor would not be
required to register such class of securities under section 12 of the
Act (15 U.S.C. 78l) but for this section.
(c) Where in connection with a succession by merger, consolidation,
exchange of securities, acquisition of assets or otherwise, securities
of an issuer that are not already registered pursuant to section 12 of
the Act (15 U.S.C. 78l) are issued to the holders of classes of
securities of two or more other issuers that are each registered
pursuant to section 12 of the Act, the class of securities so issued
shall be deemed to be registered under section 12 of the Act unless upon
consummation of the succession:
(1) Such class is exempt from such registration other than by Sec.
240.12g3-2;
(2) All securities of such class are held of record by less than 300
persons; or
(3) The securities issued in connection with the succession were
registered on Form F-8 or Form F-80 (Sec. 239.38 or Sec. 239.41 of
this chapter) and following succession the successor would not be
required to register such class of securities under section 12 of the
Act (15 U.S.C. 78l) but for this section.
(d) If the classes of securities issued by two or more predecessor
issuers (as described in paragraph (c) of this section) are registered
under the same paragraph of section 12 of the Act (15
[[Page 110]]
U.S.C. 78l), the class of securities issued by the successor issuer
shall be deemed registered under the same paragraph of section 12 of the
Act. If the classes of securities issued by the predecessor issuers are
not registered under the same paragraph of section 12 of the Act, the
class of securities issued by the successor issuer shall be deemed
registered under section 12(g) of the Act (15 U.S.C. 78l(g)).
(e) An issuer that is deemed to have a class of securities
registered pursuant to section 12 of the Act (15 U.S.C. 78l) according
to paragraph (a), (b), (c) or (d) of this section shall file reports on
the same forms and such class of securities shall be subject to the
provisions of sections 14 and 16 of the Act (15 U.S.C. 78n and 78p) to
the same extent as the predecessor issuers, except as follows:
(1) An issuer that is not a foreign issuer shall not be eligible to
file on Form 20-F (Sec. 249.220f of this chapter) or to use the
exemption in Sec. 240.3a12-3.
(2) A foreign private issuer shall be eligible to file on Form 20-F
(Sec. 249.220f of this chapter) and to use the exemption in Sec.
240.3a12-3.
(f) An issuer that is deemed to have a class of securities
registered pursuant to section 12 of the Act (15 U.S.C. 78l) according
to paragraphs (a), (b), (c) or (d) of this section shall indicate in the
Form 8-K (Sec. 249.308 of this chapter) report filed with the
Commission in connection with the succession, pursuant to the
requirements of Form 8-K, the paragraph of section 12 of the Act under
which the class of securities issued by the successor issuer is deemed
registered by operation of paragraphs (a), (b), (c) or (d) of this
section. If a successor issuer that is deemed registered under section
12(g) of the Act (15 U.S.C. 78l(g)) by paragraph (d) of this section
intends to list a class of securities on a national securities exchange,
it must file a registration statement pursuant to section 12(b) of the
Act (15 U.S.C. 78l(b)) with respect to that class of securities.
(g) An issuer that is deemed to have a class of securities
registered pursuant to section 12 of the Act (15 U.S.C. 78l) according
to paragraph (a), (b), (c) or (d) of this section shall file an annual
report for each fiscal year beginning on or after the date as of which
the succession occurred. Annual reports shall be filed within the period
specified in the appropriate form. Each such issuer shall file an annual
report for each of its predecessors that had securities registered
pursuant to section 12 of the Act (15 U.S.C. 78l) covering the last full
fiscal year of the predecessor before the registrant's succession,
unless such report has been filed by the predecessor. Such annual report
shall contain information that would be required if filed by the
predecessor.
[62 FR 39767, July 24, 1997]
Sec. 240.12g3-2 Exemptions for American depositary receipts and certain
foreign securities.
(a) Securities of any class issued by any foreign private issuer
shall be exempt from section 12(g) (15 U.S.C. 78l(g)) of the Act if the
class has fewer than 300 holders resident in the United States. This
exemption shall continue until the next fiscal year end at which the
issuer has a class of equity securities held by 300 or more persons
resident in the United States. For the purpose of determining whether a
security is exempt pursuant to this paragraph:
(1) Securities held of record by persons resident in the United
States shall be determined as provided in Sec. 240.12g5-1 except that
securities held of record by a broker, dealer, bank or nominee for any
of them for the accounts of customers resident in the United States
shall be counted as held in the United States by the number of separate
accounts for which the securities are held. The issuer may rely in good
faith on information as to the number of such separate accounts supplied
by all owners of the class of its securities which are brokers, dealers,
or banks or a nominee for any of them.
(2) Persons in the United States who hold the security only through
a Canadian Retirement Account (as that term is defined in rule 237(a)(2)
under the Securities Act of 1933 (Sec. 230.237(a)(2) of this chapter)),
shall not be counted as holders resident in the United States.
(b)(1) Securities of any foreign private issuer shall be exempt from
section 12(g) of the Act if the issuer, or a government official or
agency of the
[[Page 111]]
country of the issuer's domicile or in which it is incorporated or
organized:
(i) Shall furnish to the Commission whatever information in each of
the following categories the issuer since the beginning of its last
fiscal year (A) has made or is required to make public pursuant to the
law of the country of its domicile or in which it is incorporated or
organized, (B) has filed or is required to file with a stock exchange on
which its securities are traded and which was made public by such
exchange, or (C) has distributed or is required to distribute to its
security holders;
(ii) Shall furnish to the Commission a list identifying the
information referred to in paragraph (b)(1)(i) of this section and
stating when and by whom it is required to be made public, filed with
any such exchange, or distributed to security holders;
(iii) Shall furnish to the Commission, during each subsequent fiscal
year, whatever information is made public as described in paragraphs
(b)(1)(i) (A), (B) or (C) of this section promptly after such
information is made or required to be made public as described therein;
(iv) Shall, promptly after the end of any fiscal year in which any
changes occur in the kind of information required to be published as
referred to in the list furnished under paragraph (b)(1)(ii) of this
section or any subsequent list, furnish to the Commission a revised list
reflecting such changes; and
(v) Shall furnish to the Commission in connection with the initial
submission the following information to the extent known or which can be
obtained without unreasonable effort or expense: the number of holders
of each class of equity securities resident in the United States, the
amount and percentage of each class of outstanding equity securities
held by residents in the United States, the circumstances in which such
securities were acquired, and the date and circumstances of the most
recent public distribution of securities by the issuer or an affiliate
thereof.
(2) The information required to be furnished under paragraphs
(b)(1)(i) and (ii) of this section shall be furnished on or before the
date on which a registration statement under section 12(g) of the Act
would otherwise be required to be filed. Any issuer furnishing
information under paragraph (b)(1)(i) of this section shall notify the
Commission that it is furnished under that paragraph.
(3) The information required to be furnished under this paragraph
(b) is information material to an investment decision such as: the
financial condition or results of operations; changes in business;
acquisitions or dispositions of assets; issuance, redemption or
acquisitions of their securities; changes in management or control; the
granting of options or the payment of other remuneration to directors or
officers; and transactions with directors, officers or principal
security holders.
(4) Only one complete copy of any information or document need be
furnished under paragraph (b)(1) of this section. Such information and
documents need not be under cover of any prescribed form and shall not
be deemed to be ``filed'' with the Commission or otherwise subject to
the liabilities of section 18 of the Act. Press releases and all other
communications or materials distributed directly to securityholders of
each class of securities to which the exemption relates shall be in
English. English versions or adequate summaries in English may be
furnished in lieu of original English translations. No other documents
need be furnished unless the issuer has prepared or caused to be
prepared, English translations, versions, or summaries of them. If no
English translations, versions, or summaries have been prepared, a brief
description in English of any such documents shall be furnished.
Information or documents in a language other than English are not
required to be furnished. If practicable, the Commission file number
shall appear on the information furnished or in an accompanying letter.
Any information or document previously sent to the Commission under
cover of Form 40-F or Form 6-K need not be furnished under paragraph
(b)(1) of this section.
(5) The furnishing of any information or document under paragraph
(b) of this rule shall not constitute an admission for any purpose that
the issuer is subject to the Act.
[[Page 112]]
(c) Depositary Shares registered on Form F-6 (Sec. 239.36 of this
chapter), but not the underlying deposited securities, are exempt from
section 12(g) of the Act under this paragraph (c).
(d) The exemption provided by paragraph (b) of this rule shall not
be available for the following securities:
(1) Securities of a foreign private issuer that has or has had
during the prior eighteen months any securities registered under section
12 of the Act or a reporting obligation (suspended or active) under
section 15(d) of the Act (other than arising solely by virtue of the use
of Form F-7, F-8, F-9, F-10 or F-80) ;
(2) Securities of a foreign private issuer issued in a transaction
(other than a transaction registered on Form F-8, F-9, F-10 or F-80) to
acquire by merger, consolidation, exchange of securities or acquisition
of assets, another issuer that had securities registered under section
12 of the Act or a reporting obligation (suspended or active) under
section 15(d) of the Act; and
(3) Securities quoted in an ``automated inter-dealer quotation
system'' or securities represented by American Depositary Receipts so
quoted unless all the following conditions are met:
(i) Such securities were so quoted on October 5, 1983 and have been
continuously traded since;
(ii) The issuer is in compliance with the exemption in paragraph (b)
of this section on October 5, 1983 and has continuously maintained the
exemption since; and
(iii) After January 2, 1986, the issuer is organized under the laws
of any country except Canada or a political subdivision thereof.
[48 FR 46739, Oct. 14, 1983, as amended at 49 FR 12689, Mar. 30, 1984;
56 FR 30068, July 1, 1991; 65 FR 37676, June 15, 2000]
Sec. 240.12g-4 Certifications of termination of registration under
section 12(g).
(a) Termination of registration of a class of securities shall take
effect 90 days, or such shorter period as the Commission may determine,
after the issuer certifies to the Commission on Form 15 that:
(1) Such class of securities is held of record by:
(i) Less than 300 persons; or
(ii) By less than 500 persons, where the total assets of the issuer
have not exceeded $10 million on the last day of each of the issuer's
most recent three fiscal years; or
(2) Such class of securities of a foreign private issuer, as defined
in Rule 3b-4 (Sec. 240.3b-4), is held of record by:
(i) Less than 300 persons resident in the United States or
(ii) Less than 500 persons resident in the United States where the
total assets of the issuer have not exceeded $10 million on the last day
of each of the issuer's most recent three fiscal years.
For purposes of this paragraph, the number of persons resident in the
United States shall be determined in accordance with the provisions of
Rule 12g3-2(a) (Sec. 240.12g3-2(a)).
(b) The issuer's duty to file any reports required under section
13(a) shall be suspended immediately upon filing a certification on Form
15; Provided, however, That if the certification on Form 15 is
subsequently withdrawn or denied, the issuer shall, within 60 days after
the date of such withdrawal or denial, file with the Commission all
reports which would have been required had the certification on Form 15
not been filed. If the suspension resulted from the issuer's merger
into, or consolidation with, another issuer or issuers, the
certification shall be filed by the successor issuer.
(Secs. 12(g)(4), 12(h), 13(a), 15(d), 23(a), 48 Stat. 892, 894, 895,
901; sec. 203(a), 49 Stat. 704; secs. 3, 8, 49 Stat. 1377, 1379; secs.
3, 4, 6, 78 Stat. 565-568, 569, 570-574; sec. 18, 89 Stat. 155; sec.
204, 91 Stat. 1500; 15 U.S.C. 78l(g)(4), 78l(h), 78m(a), 78o(d), 78w(a))
[49 FR 12689, Mar. 30, 1984, as amended at 51 FR 25362, July 14, 1986;
61 FR 21356, May 9, 1996]
Sec. 240.12g5-1 Definition of securities ``held of record''.
(a) For the purpose of determining whether an issuer is subject to
the provisions of sections 12(g) and 15(d) of the Act, securities shall
be deemed to be ``held of record'' by each person who is identified as
the owner of such securities on records of security holders maintained
by or on behalf of the issuer, subject to the following:
[[Page 113]]
(1) In any case where the records of security holders have not been
maintained in accordance with accepted practice, any additional person
who would be identified as such an owner on such records if they had
been maintained in accordance with accepted practice shall be included
as a holder of record.
(2) Securities identified as held of record by a corporation, a
partnership, a trust whether or not the trustees are named, or other
organization shall be included as so held by one person.
(3) Securities identified as held of record by one or more persons
as trustees, executors, guardians, custodians or in other fiduciary
capacities with respect to a single trust, estate or account shall be
included as held of record by one person.
(4) Securities held by two or more persons as coowners shall be
included as held by one person.
(5) Each outstanding unregistered or bearer certificate shall be
included as held of record by a separate person, except to the extent
that the issuer can establish that, if such securities were registered,
they would be held of record, under the provisions of this rule, by a
lesser number of persons.
(6) Securities registered in substantially similar names where the
issuer has reason to believe because of the address or other indications
that such names represent the same person, may be included as held of
record by one person.
(b) Notwithstanding paragraph (a) of this section:
(1) Securities held, to the knowledge of the issuer, subject to a
voting trust, deposit agreement or similar arrangement shall be included
as held of record by the record holders of the voting trust
certificates, certificates of deposit, receipts or similar evidences of
interest in such securities: Provided, however, That the issuer may rely
in good faith on such information as is received in response to its
request from a non-affiliated issuer of the certificates or evidences of
interest.
(2) Whole or fractional securities issued by a savings and loan
association, building and loan association, cooperative bank, homestead
association, or similar institution for the sole purpose of qualifying a
borrower for membership in the issuer, and which are to be redeemed or
repurchased by the issuer when the borrower's loan is terminated, shall
not be included as held of record by any person.
(3) If the issuer knows or has reason to know that the form of
holding securities of record is used primarily to circumvent the
provisions of section 12(g) or 15(d) of the Act, the beneficial owners
of such securities shall be deemed to be the record owners thereof.
(Sec. 3, 48 Stat. 882, as amended, sec. 3, 78 Stat. 566; 15 U.S.C. 78c,
78l)
[30 FR 484, Jan. 14, 1965]
Sec. 240.12g5-2 Definition of ``total assets''.
For the purpose of section 12(g)(1) of the Act, the term total
assets shall mean the total assets as shown on the issuer's balance
sheet or the balance sheet of the issuer and its subsidiaries
consolidated, whichever is larger, as required to be filed on the form
prescribed for registration under this section and prepared in
accordance with the pertinent provisions of Regulation S-X (17 CFR part
210). Where the security is a certificate of deposit, voting trust
certificate, or certificate or other evidence of interest in a similar
trust or agreement, the ``total assets'' of the issuer of the security
held under the trust or agreement shall be deemed to be the ``total
assets'' of the issuer of such certificate or evidence of interest.
(Sec. 3, 48 Stat. 882, as amended, sec. 3, 78 Stat. 566; 15 U.S.C. 78c,
78l)
[30 FR 484, Jan. 14, 1965]
Sec. 240.12h-1 Exemptions from registration under section 12(g) of
the Act.
Issuers shall be exempt from the provisions of section 12(g) of the
Act with respect to the following securities:
(a) Any interest or participation in an employee stock bonus, stock
purchase, profit sharing, pension, retirement, incentive, thrift,
savings or similar plan which is not transferable by the holder except
in the event of death or mental incompetency, or any security issued
solely to fund such plans;
(b) Any interest or participation in any common trust fund or
similar fund maintained by a bank exclusively for
[[Page 114]]
the collective investment and reinvestment of monies contributed thereto
by the bank in its capacity as a trustee, executor, administrator, or
guardian. For purposes of this paragraph (b), the term ``common trust
fund'' shall include a common trust fund which is maintained by a bank
which is a member of an affiliated group, as defined in section 1504(a)
of the Internal Revenue Code of 1954 (26 U.S.C. 1504(a)), and which is
maintained exclusively for the investment and reinvestment of monies
contributed thereto by one or more bank members of such affilated group
in the capacity of trustee, executor, administrator, or guardian;
Provided, That:
(1) The common trust fund is operated in compliance with the same
state and Federal regulatory requirements as would apply if the bank
maintaining such fund as any other contributing banks were the same
entity; and
(2) The rights of persons for whose benefit a contributiong bank
acts as trustee, executor, administrator or guardian would not be
diminished by reason of the maintenance of such common trust fund by
another bank member of the affiliated group;
(c) Any class of equity security which would not be outstanding 60
days after a registration statement would be required to be filed with
respect thereto;
(d) Any standardized option, as that term is defined in section
240.9b-1(a)(4), that is issued by a clearing agency registered under
section 17A of the Act (15 U.S.C. 78q-1) and traded on a national
securities exchange registered pursuant to section 6(a) of the Act (15
U.S.C. 78f(a)) or on a national securities association registered
pursuant to section 15A(a) of the Act (15 U.S.C. 780-3(a)); and
(e) Any security futures product that is traded on a national
securities exchange registered pursuant to section 6 of the Act (15
U.S.C. 78f) or on a national securities association registered pursuant
to section 15A(a) of the Act (15 U.S.C. 780-3(a)) and cleared by a
clearing agency that is registered pursuant to section 17A of the Act
(15 U.S.C. 78q-1) or is exempt from registration under section 17A(b)(7)
of the Act (15 U.S.C. 78q-1(b)(7)).
[30 FR 6114, Apr. 30, 1965, as amended at 43 FR 2392, Jan. 17, 1978.
Redesignated at 47 FR 17052, Apr. 21, 1982; 68 FR 192, Jan. 2, 2003]
Sec. 240.12h-2 [Reserved]
Sec. 240.12h-3 Suspension of duty to file reports under section 15(d).
(a) Subject to paragraphs (c) and (d) of this section, the duty
under section 15(d) to file reports required by section 13(a) of the Act
with respect to a class of securities specified in paragraph (b) of this
section shall be suspended for such class of securities immediately upon
filing with the Commission a certification on Form 15 (17 CFR 249.323)
if the issuer of such class has filed all reports required by section
13(a), without regard to Rule 12b-25 (17 CFR 249.322), for the shorter
of its most recent three fiscal years and the portion of the current
year preceding the date of filing Form 15, or the period since the
issuer became subject to such reporting obligation. If the certification
on Form 15 is subsequently withdrawn or denied, the issuer shall, within
60 days, file with the Commission all reports which would have been
required if such certification had not been filed.
(b) The classes of securities eligible for the suspension provided
in paragraph (a) of this section are:
(1) Any class of securites held of record by:
(i) Less than 300 persons; or
(ii) By less then 500 persons, where the total assets of the issuer
have not exceeded $10 million on the last day of each of the issuer's
three most recent fiscal years;
(2) Any class of securities of a foreign private issuer, as defined
in Rule 3b-4 (Sec. 240.3b-4), held of record by:
(i) Less than 300 persons resident in the United States or
(ii) Less than 500 persons resident in the United States where the
total assets of the issuer have not exceeded $10 million on the last day
of each of the issuer's three most recent fiscal years.
For purposes of this paragraph, the number of persons resident in the
United States shall be determined in accordance with the provisions of
Rule 12g3-2(a) (Sec. 240.12g3-2(a)); and
[[Page 115]]
(3) Any class or securities deregistered pursuant to section 12(d)
of the Act if such class would not thereupon be deemed registered under
section 12(g) of the Act or the rules thereunder.
(c) This section shall not be available for any class of securities
for a fiscal year in which a registration statement relating to that
class becomes effective under the Securities Act of 1933, or is required
to be updated pursuant to section 10(a)(3) of the Act, and, in the case
of paragraphs (b)(1)(ii) and (2)(ii), the two succeeding fiscal years;
Provided, however, That this paragraph shall not apply to the duty to
file reports which arises solely from a registration statement filed by
an issuer with no significant assets, for the reorganization of a non-
reporting issuer into a one subsidiary holding company in which equity
security holders receive the same proportional interest in the holding
company as they held in the non-reporting issuer, except for changes
resulting from the exercise of dissenting shareholder rights under state
law.
(d) The suspension provided by this rule relates only to the
reporting obligation under section 15(d) with respect to a class of
securities, does not affect any other duties imposed on that class of
securities, and shall continue as long as criteria (i) and (ii) in
either paragraph (b)(1) or (2) is met on the first day of any subsequent
fiscal year; Provided, however, That such criteria need not be met if
the duty to file reports arises solely from a registration statement
filed by an issuer with no significant assets in a reorganization of a
non-reporting company into a one subsidiary holding company in which
equity security holders receive the same proportional interest in the
holding company as they held in the non-reporting issuer except for
changes resulting from the exercise of dissenting shareholder rights
under state law.
(e) If the suspension provided by this rule is discontinued because
a class of securities does not meet the eligibility criteria of
paragraph (b) on the first day of an issuer's fiscal year, then the
issuer shall resume periodic reporting pursuant to section 15(d) by
filing an annual report on Form 10-K and Form 10-KSB for its preceding
fiscal year, not later than 120 days after the end of such fiscal year.
(Secs. 12(g)(4), 12(h), 13(a), 15(d), 23(a), 48 Stat. 892, 894, 895,
901; sec. 203(a), 49 Stat. 704; secs. 3, 8, 49 Stat. 1377, 1379; secs.
3, 4, 6, 78 Stat. 565-568, 569, 570-574; sec. 18, 89 Stat. 155; sec.
204, 91 Stat. 1500; 15 U.S.C. 78l(g)(4), 78l(h), 78m(a), 78o(d), 78w(a))
[49 FR 12689, Mar. 30, 1984, as amended at 51 FR 25362, July 14, 1986;
61 FR 21356, May 9, 1996]
Sec. 240.12h-4 Exemption from duty to file reports under section 15(d).
An issuer shall be exempt from the duty under section 15(d) of the
Act to file reports required by section 13(a) of the Act with respect to
securities registered under the Securities Act of 1933 on Form F-7, Form
F-8 or Form F-80, provided that the issuer is exempt from the
obligations of Section 12(g) of the Act pursuant to Rule 12g3-2(b).
[56 FR 30068, July 1, 1991]
Sec. 240.12h-5 Exemption for subsidiary issuers of guaranteed
securities and subsidiary guarantors.
(a) Any issuer of a guaranteed security, or guarantor of a security,
that is permitted to omit financial statements by Sec. 210.3-10 of
Regulation S-X of this chapter is exempt from the requirements of
Section 13(a) or 15(d) of the Act (15 U.S.C. 78m(a) or 78o(d)).
(b) Any issuer of a guaranteed security, or guarantor of a security,
that would be permitted to omit financial statements by Sec. 210.3-10
of Regulation S-X of this chapter, but is required to file financial
statements in accordance with the operation of Sec. 210.3-10(g) of
Regulation S-X of this chapter, is exempt from the requirements of
Section 13(a) or 15(d) of the Act (15 U.S.C. 78m(a) or 78o(d)).
[65 FR 51711, Aug. 24, 2000]
Regulation 13A: Reports of Issuers of Securities Registered Pursuant to
Section 12
Annual Reports--Table of Contents
Sec. 240.13a-1 Requirements of annual reports.
Every issuer having securities registered pursuant to section 12 of
the
[[Page 116]]
Act (15 U.S.C. 78l) shall file an annual report on the appropriate form
authorized or prescribed therefor for each fiscal year after the last
full fiscal year for which financial statements were filed in its
registration statement. Annual reports shall be filed within the period
specified in the appropriate form.
[62 FR 39767, July 24, 1997]
Sec. 240.13a-2 [Reserved]
Sec. 240.13a-3 Reporting by Form 40-F registrant.
A registrant that is eligible to use Forms 40-F and 6-K and files
reports in accordance therewith shall be deemed to satisfy the
requirements of Regulation 13A (Sec. Sec. 240.13a-1 through 240.13a-17
of this chapter).
[56 FR 30068, July 1, 1991]
Other Reports
Sec. 240.13a-10 Transition reports.
(a) Every issuer that changes its fiscal closing date shall file a
report covering the resulting transition period between the closing date
of its most recent fiscal year and the opening date of its new fiscal
year; Provided, however, that an issuer shall file an annual report for
any fiscal year that ended before the date on which the issuer
determined to change its fiscal year end. In no event shall the
transition report cover a period of 12 or more months.
(b) The report pursuant to this section shall be filed for the
transition period not more than the number of days specified in
paragraph (j) of this section after either the close of the transition
period or the date of the determination to change the fiscal closing
date, whichever is later. The report shall be filed on the form
appropriate for annual reports of the issuer, shall cover the period
from the close of the last fiscal year end and shall indicate clearly
the period covered. The financial statements for the transition period
filed therewith shall be audited. Financial statements, which may be
unaudited, shall be filed for the comparable period of the prior year,
or a footnote, which may be unaudited, shall state for the comparable
period of the prior year, revenues, gross profits, income taxes, income
or loss from continuing operations before extraordinary items and
cumulative effect of a change in accounting principles and net income or
loss. The effects of any discontinued operations and/or extraordinary
items as classified under the provisions of generally accepted
accounting principles also shall be shown, if applicable. Per share data
based upon such income or loss and net income or loss shall be presented
in conformity with applicable accounting standards. Where called for by
the time span to be covered, the comparable period financial statements
or footnote shall be included in subsequent filings.
(c) If the transition period covers a period of less than six
months, in lieu of the report required by paragraph (b) of this section,
a report may be filed for the transition period on Form 10-Q and Form
10-QSB (Sec. 249.308a of this chapter) not more than the number of days
specified in paragraph (j) of this section after either the close of the
transition period or the date of the determination to change the fiscal
closing date, whichever is later. The report on Form 10-Q and Form 10-
QSB shall cover the period from the close of the last fiscal year end
and shall indicate clearly the period covered. The financial statements
filed therewith need not be audited but, if they are not audited, the
issuer shall file with the first annual report for the newly adopted
fiscal year separate audited statements of income and cash flows
covering the transition period. The notes to financial statements for
the transition period included in such first annual report may be
integrated with the notes to financial statements for the full fiscal
period. A separate audited balance sheet as of the end of the transition
period shall be filed in the annual report only if the audited balance
sheet as of the end of the fiscal year prior to the transition period is
not filed. Schedules need not be filed in transition reports on Form 10-
Q and Form 10-QSB.
(d) Notwithstanding the foregoing in paragraphs (a), (b), and (c) of
this section, if the transition period covers a period of one month or
less, the issuer need not file a separate transition report if either:
[[Page 117]]
(1) The first report required to be filed by the issuer for the
newly adopted fiscal year after the date of the determination to change
the fiscal year end is an annual report, and that report covers the
transition period as well as the fiscal year; or
(2)(i) The issuer files with the first annual report for the newly
adopted fiscal year separate audited statements of income and cash flows
covering the transition period; and
(ii) The first report required to be filed by the issuer for the
newly adopted fiscal year after the date of the determination to change
the fiscal year end is a quarterly report on Form 10-Q and Form 10-QSB;
and
(iii) Information on the transition period is included in the
issuer's quarterly report on Form 10-Q and Form 10-QSB for the first
quarterly period (except the fourth quarter) of the newly adopted fiscal
year that ends after the date of the determination to change the fiscal
year. The information covering the transition period required by Part II
and Item 2 of Part I may be combined with the information regarding the
quarter. However, the financial statements required by Part I, which may
be unaudited, shall be furnished separately for the transition period.
(e) Every issuer required to file quarterly reports on Form 10-Q and
Form 10-QSB pursuant to Sec. 240.13a-13 of this chapter that changes
its fiscal year end shall:
(1) File a quarterly report on Form 10-Q and Form 10-QSB within the
time period specified in General Instruction A.1. to that form for any
quarterly period (except the fourth quarter) of the old fiscal year that
ends before the date on which the issuer determined to change its fiscal
year end, except that the issuer need not file such quarterly report if
the date on which the quarterly period ends also is the date on which
the transition period ends;
(2) File a quarterly report on Form 10-Q and Form 10-QSB within the
time specified in General Instruction A.1. to that form for each
quarterly period of the old fiscal year within the transition period. In
lieu of a quarterly report for any quarter of the old fiscal year within
the transition period, the issuer may file a quarterly report on Form
10-Q and Form 10-QSB for any period of three months within the
transition period that coincides with a quarter of the newly adopted
fiscal year if the quarterly report is filed within the number of days
specified in paragraph (j) of this section after the end of such three
month period, provided the issuer thereafter continues filing quarterly
reports on the basis of the quarters of the newly adopted fiscal year;
(3) Commence filing quarterly reports for the quarters of the new
fiscal year no later than the quarterly report for the first quarter of
the new fiscal year that ends after the date on which the issuer
determined to change the fiscal year end; and
(4) Unless such information is or will be included in the transition
report, or the first annual report on Form 10-K and Form 10-KSB for the
newly adopted fiscal year, include in the initial quarterly report on
Form 10-Q and Form 10-QSB for the newly adopted fiscal year information
on any period beginning on the first day subsequent to the period
covered by the issuer's final quarterly report on Form 10-Q and Form 10-
QSB or annual report on Form 10-K and Form 10-KSB for the old fiscal
year. The information covering such period required by Part II and Item
2 of Part I may be combined with the information regarding the quarter.
However, the financial statements required by Part I, which may be
unaudited, shall be furnished separately for such period.
Note to paragraphs (c) and (e):
If it is not practicable or cannot be cost-justified to furnish in a
transition report on Form 10-Q and Form 10-QSB or a quarterly report for
the newly adopted fiscal year financial statements for corresponding
periods of the prior year where required, financial statements may be
furnished for the quarters of the preceding fiscal year that most nearly
are comparable if the issuer furnishes an adequate discussion of
seasonal and other factors that could affect the comparability of
information or trends reflected, an assessment of the comparability of
the data, and a representation as to the reason recasting has not been
undertaken.
(f) Every successor issuer with securities registered under Section
12 of this Act that has a different fiscal year from that of its
predecessor(s) shall file
[[Page 118]]
a transition report pursuant to this section, containing the required
information about each predecessor, for the transition period, if any,
between the close of the fiscal year covered by the last annual report
of each predecessor and the date of succession. The report shall be
filed for the transition period on the form appropriate for annual
reports of the issuer not more than the number of days specified in
paragraph (j) of this section after the date of the succession, with
financial statements in conformity with the requirements set forth in
paragraph (b) of this section. If the transition period covers a period
of less than six months, in lieu of a transition report on the form
appropriate for the issuer's annual reports, the report may be filed for
the transition period on Form 10-Q and Form 10-QSB not more than the
number of days specified in paragraph (j) of this section after the date
of the succession, with financial statements in conformity with the
requirements set forth in paragraph (c) of this section. Notwithstanding
the foregoing, if the transition period covers a period of one month or
less, the successor issuer need not file a separate transition report if
the information is reported by the successor issuer in conformity with
the requirements set forth in paragraph (d) of this section.
(g)(1) Paragraphs (a) through (f) of this section shall not apply to
foreign private issuers.
(2) Every foreign private issuer that changes its fiscal closing
date shall file a report covering the resulting transition period
between the closing date of its most recent fiscal year and the opening
date of its new fiscal year. In no event shall a transition report cover
a period longer than 12 months.
(3) The report for the transition period shall be filed on Form 20-F
responding to all items to which such issuer is required to respond when
Form 20-F is used as an annual report. Such report shall be filed within
six months after either the close of the transition period or the date
on which the issuer made the determination to change the fiscal closing
date, whichever is later. The financial statements for the transition
period filed therewith shall be audited.
(4) If the transition period covers a period of six or fewer months,
in lieu of the report required by paragraph (g)(3) of this section, a
report for the transition period may be filed on Form 20-F responding to
Items 5, 8.A.7., 13, 14, and 17 or 18 within three months after either
the close of the transition period or the date on which the issuer made
the determination to change the fiscal closing date, whichever is later.
The financial statements required by either Item 17 or Item 18 shall be
furnished for the transition period. Such financial statements may be
unaudited and condensed as permitted in Article 10 of Regulation S-X
(Sec. 210.10-01 of this chapter), but if the financial statements are
unaudited and condensed, the issuer shall file with the first annual
report for the newly adopted fiscal year separate audited statements of
income and cash flows covering the transition period.
(5) Notwithstanding the foregoing in paragraphs (g)(2), (g)(3), and
(g)(4) of this section, if the transition period covers a period of one
month or less, a foreign private issuer need not file a separate
transition report if the first annual report for the newly adopted
fiscal year covers the transition period as well as the fiscal year.
(h) The provisions of this rule shall not apply to investment
companies required to file reports pursuant to Rule 30b1-1 (Sec.
270.30b1-1 of this chapter) under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.).
(i) No filing fee shall be required for a transition report filed
pursuant to this section.
(j)(1) For transition reports to be filed on the form appropriate
for annual reports of the issuer, the number of days shall be:
(i) 60 days (75 days for fiscal years ending before December 15,
2006) for large accelerated filers (as defined in Sec. 240.12b-2);
(ii) 75 days for accelerated filers (as defined in Sec. 240.12b-2);
and
(iii) 90 days for all other issuers; and
(2) For transition reports to be filed on Form 10-Q or Form 10-QSB
(Sec. 249.308a or Sec. 249.308b of this chapter), the number of days
shall be:
[[Page 119]]
(i) 40 days for large accelerated filers and accelerated filers (as
defined in Sec. 240.12b-2); and
(ii) 45 days for all other issuers.
(k)(1) Paragraphs (a) through (g) of this section shall not apply to
asset-backed issuers.
(2) Every asset-backed issuer that changes its fiscal closing date
shall file a report covering the resulting transition period between the
closing date of its most recent fiscal year and the opening date of its
new fiscal year. In no event shall a transition report cover a period
longer than 12 months.
(3) The report for the transition period shall be filed on Form 10-K
(Sec. 249.310 of this chapter) responding to all items to which such
asset-backed issuer is required to respond pursuant to General
Instruction J. of Form 10-K. Such report shall be filed within 90 days
after the later of either the close of the transition period or the date
on which the issuer made the determination to change the fiscal closing
date.
(4) Notwithstanding the foregoing in paragraphs (k)(2) and (k)(3) of
this section, if the transition period covers a period of one month or
less, an asset-backed issuer need not file a separate transition report
if the first annual report for the newly adopted fiscal year covers the
transition period as well as the fiscal year.
(5) Any obligation of the asset-backed issuer to file distribution
reports pursuant to Sec. 240.13a-17 will continue to apply regardless
of a change in the asset-backed issuer's fiscal closing date.
Note 1: In addition to the report or reports required to be filed
pursuant to this section, every issuer, except a foreign private issuer
or an investment company required to file reports pursuant to Sec.
270.30b1-1 of this chapter, that changes its fiscal closing date is
required to file a Form 8-K (Sec. 249.308 of this chapter) report that
includes the information required by Item 5.03 of Form 8-K within the
period specified in General Instruction B.1. to that form.
Note 2: The report or reports to be filed pursuant to this section
must include the certification required by Sec. 240.13a-14.
[54 FR 10316, Mar. 13, 1989, as amended at 56 FR 30068, July 1, 1991; 64
FR 53912, Oct. 5, 1999; 67 FR 57288, Sept. 9, 2002; 67 FR 58505, Sept.
16, 2002; 69 FR 15618, Mar. 25, 2004; 69 FR 68325, Nov. 23, 2004; 70 FR
1621, Jan. 7, 2005; 70 FR 76641, Dec. 27, 2005]
Sec. 240.13a-11 Current reports on Form 8-K (Sec. 249.308 of this
chapter).
(a) Except as provided in paragraph (b) of this section, every
registrant subject to Sec. 240.13a-1 shall file a current report on
Form 8-K within the period specified in that form unless substantially
the same information as that required by Form 8-K has been previously
reported by the registrant.
(b) This section shall not apply to foreign governments, foreign
private issuers required to make reports on Form 6-K (17 CFR 249.306)
pursuant to Sec. 240.13a-16, issuers of American Depositary Receipts
for securities of any foreign issuer, or investment companies required
to file reports pursuant to Sec. 270.30b1-1 of this chapter under the
Investment Company Act of 1940, except where such investment companies
are required to file notice of a blackout period pursuant to Sec.
245.104 of this chapter.
(c) No failure to file a report on Form 8-K that is required solely
pursuant to Item 1.01, 1.02, 2.03, 2.04, 2.05, 2.06, 4.02(a) or 6.03 of
Form 8-K shall be deemed to be a violation of 15 U.S.C. 78j(b) and Sec.
240.10b-5.
[42 FR 4428, Jan. 25, 1977, as amended at 50 FR 27939, July 9, 1985; 68
FR 4355, Jan. 28, 2003; 69 FR 15618, Mar. 25, 2004; 70 FR 1621, Jan. 7,
2005]
Sec. 240.13a-13 Quarterly reports on Form 10-Q and Form 10-QSB
(Sec. 249.308a and Sec. 249.308b of this chapter).
(a) Except as provided in paragraphs (b) and (c) of this section,
every issuer that has securities registered pursuant to section 12 of
the Act and is required to file annual reports pursuant to section 13 of
the Act, and has filed or intends to file such reports on Form 10-K and
Form 10-KSB (Sec. 249.310 of this chapter) or U5S (Sec. 259.5s of this
chapter), shall file a quarterly report on Form 10-Q and Form 10-QSB
(Sec. 249.308a
[[Page 120]]
of this chapter) within the period specified in General Instruction A.1.
to that form for each of the first three quarters of each fiscal year of
the issuer, commencing with the first fiscal quarter following the most
recent fiscal year for which full financial statements were included in
the registration statement, or, if the registration statement included
financial statements for an interim period subsequent to the most recent
fiscal year end meeting the requirements of Article 10 of Regulation S-
X, for the first fiscal quarter subsequent to the quarter reported upon
in the registration statement. The first quarterly report of the issuer
shall be filed either within 45 days after the effective date of the
registration statement or on or before the date on which such report
would have been required to be filed if the issuer has been required to
file reports on Form 10-Q and Form 10-QSB as of its last fiscal quarter,
whichever is later.
(b) The provisions of this rule shall not apply to the following
issuers:
(1) Investment companies required to file reports pursuant to Sec.
270.30b1-1;
(2) Foreign private issuers required to file reports pursuant to
Sec. 240.13a-16; and
(3) Asset-backed issuers required to file reports pursuant to Sec.
240.13a-17.
(c) Part I of the quarterly reports on Form 10-Q or Form 10-QSB need
not be filed by:
(1) Mutual life insurance companies; or
(2) Mining companies not in the production stage but engaged
primarily in the exploration for the development of mineral deposits
other than oil, gas or coal, if all of the following conditions are met:
(i) The registrant has not been in production during the current
fiscal year or the two years immediately prior thereto; except that
being in production for an aggregate period of not more than eight
months over the three-year period shall not be a violation of this
condition.
(ii) Receipts from the sale of mineral products or from the
operations of mineral producing properties by the registrant and its
subsidiaries combined have not exceeded $500,000 in any of the most
recent six years and have not aggregated more than $1,500,000 in the
most recent six fiscal years.
(d) Notwithstanding the foregoing provisions of this section, the
financial information required by Part I of Form 10-Q and Form 10-QSB,
shall not be deemed to be ``filed'' for the purpose of section 18 of the
Act or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act.
[42 FR 24064, May 12, 1977, as amended at 48 FR 19877, May 3, 1983; 50
FR 27939, July 9, 1985; 54 FR 10317, Mar. 13, 1989; 57 FR 10615, Mar.
27, 1992; 61 FR 30403, June 14, 1996; 70 FR 1621, Jan. 7, 2005]
Sec. 240.13a-14 Certification of disclosure in annual and quarterly
reports.
(a) Each report, including transition reports, filed on Form 10-Q,
Form 10-QSB, Form 10-K, Form 10-KSB, Form 20-F or Form 40-F (Sec. Sec.
249.308a, 249.308b, 249.310, 249.310b, 249.220f or 249.240f of this
chapter) under section 13(a) of the Act (15 U.S.C. 78m(a)), other than a
report filed by an Asset-Backed Issuer (as defined in Sec. 229.1101 of
this chapter) or a report on Form 20-F filed under Sec. 240.13a-19,
must include certifications in the form specified in the applicable
exhibit filing requirements of such report and such certifications must
be filed as an exhibit to such report. Each principal executive and
principal financial officer of the issuer, or persons performing similar
functions, at the time of filing of the report must sign a
certification.
(b) Each periodic report containing financial statements filed by an
issuer pursuant to section 13(a) of the Act (15 U.S.C. 78m(a)) must be
accompanied by the certifications required by Section 1350 of Chapter 63
of Title 18 of the United States Code (18 U.S.C. 1350) and such
certifications must be furnished as an exhibit to such report as
specified in the applicable exhibit requirements for such report. Each
principal executive and principal financial officer of the issuer (or
equivalent thereof) must sign a certification. This requirement may be
satisfied by a single certification signed by an issuer's principal
executive and principal financial officers.
(c) A person required to provide a certification specified in
paragraph (a),
[[Page 121]]
(b) or (d) of this section may not have the certification signed on his
or her behalf pursuant to a power of attorney or other form of
confirming authority.
(d) Each annual report and transition report filed on Form 10-K
(Sec. 249.310 of this chapter) by an asset-backed issuer under section
13(a) of the Act (15 U.S.C. 78m(a)) must include a certification in the
form specified in the applicable exhibit filing requirements of such
report and such certification must be filed as an exhibit to such
report. Terms used in paragraphs (d) and (e) of this section have the
same meaning as in Item 1101 of Regulation AB (Sec. 229.1101 of this
chapter).
(e) With respect to asset-backed issuers, the certification required
by paragraph (d) of this section must be signed by either:
(1) The senior officer in charge of securitization of the depositor
if the depositor is signing the report; or
(2) The senior officer in charge of the servicing function of the
servicer if the servicer is signing the report on behalf of the issuing
entity. If multiple servicers are involved in servicing the pool assets,
the senior officer in charge of the servicing function of the master
servicer (or entity performing the equivalent function) must sign if a
representative of the servicer is to sign the report on behalf of the
issuing entity.
(f) The certification requirements of this section do not apply to
XBRL-Related Documents, as defined in Sec. 232.11 of this chapter.
[67 FR 57288, Sept. 9, 2002, as amended at 68 FR 36665, June 18, 2003;
70 FR 1621, Jan. 7, 2005; 70 FR 6572, Feb. 8, 2005; 70 FR 42247, July
21, 2005]
Sec. 240.13a-15 Controls and procedures.
(a) Every issuer that has a class of securities registered pursuant
to section 12 of the Act (15 U.S.C. 78l), other than an Asset-Backed
Issuer (as defined in Sec. 229.1101 of this chapter), a small business
investment company registered on Form N-5 (Sec. Sec. 239.24 and 274.5
of this chapter), or a unit investment trust as defined by section 4(2)
of the Investment Company Act of 1940 (15 U.S.C. 80a-4(2)), must
maintain disclosure controls and procedures (as defined in paragraph (e)
of this section) and internal control over financial reporting (as
defined in paragraph (f) of this section).
(b) Each such issuer's management must evaluate, with the
participation of the issuer's principal executive and principal
financial officers, or persons performing similar functions, the
effectiveness of the issuer's disclosure controls and procedures, as of
the end of each fiscal quarter, except that management must perform this
evaluation:
(1) In the case of a foreign private issuer (as defined in Sec.
240.3b-4) as of the end of each fiscal year; and
(2) In the case of an investment company registered under section 8
of the Investment Company Act of 1940 (15 U.S.C. 80a-8), within the 90-
day period prior to the filing date of each report requiring
certification under Sec. 270.30a-2 of this chapter.
(c) The management of each such issuer, other than an investment
company registered under section 8 of the Investment Company Act of
1940, must evaluate, with the participation of the issuer's principal
executive and principal financial officers, or persons performing
similar functions, the effectiveness, as of the end of each fiscal year,
of the issuer's internal control over financial reporting. The framework
on which management's evaluation of the issuer's internal control over
financial reporting is based must be a suitable, recognized control
framework that is established by a body or group that has followed due-
process procedures, including the broad distribution of the framework
for public comment.
(d) The management of each such issuer, other than an investment
company registered under section 8 of the Investment Company Act of
1940, must evaluate, with the participation of the issuer's principal
executive and principal financial officers, or persons performing
similar functions, any change in the issuer's internal control over
financial reporting, that occurred during each of the issuer's fiscal
quarters, or fiscal year in the case of a foreign private issuer, that
has materially affected, or is reasonably likely to materially affect,
the issuer's internal control over financial reporting.
[[Page 122]]
(e) For purposes of this section, the term disclosure controls and
procedures means controls and other procedures of an issuer that are
designed to ensure that information required to be disclosed by the
issuer in the reports that it files or submits under the Act (15 U.S.C.
78a et seq.) is recorded, processed, summarized and reported, within the
time periods specified in the Commission's rules and forms. Disclosure
controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed
by an issuer in the reports that it files or submits under the Act is
accumulated and communicated to the issuer's management, including its
principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(f) The term internal control over financial reporting is defined as
a process designed by, or under the supervision of, the issuer's
principal executive and principal financial officers, or persons
performing similar functions, and effected by the issuer's board of
directors, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those
policies and procedures that:
(1) Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the issuer;
(2) Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and
expenditures of the issuer are being made only in accordance with
authorizations of management and directors of the issuer; and
(3) Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
issuer's assets that could have a material effect on the financial
statements.
[68 FR 36666, June 18, 2003, as amended at 70 FR 1621, Jan. 7, 2005]
Sec. 240.13a-16 Reports of foreign private issuers on Form 6-K
(17 CFR 249.306).
(a) Every foreign private issuer which is subject to Rule 13a-1 (17
CFR 240.13a-1) shall make reports on Form 6-K, except that this rule
shall not apply to:
(1) Investment companies required to file reports pursuant to Rule
30b1-1 (17 CFR 270.30b1-1);
(2) Issuers of American depositary receipts for securities of any
foreign issuer;
(3) Issuers filing periodic reports on Forms 10-K and Form 10-KSB,
10-Q and Form 10-QSB and 8-K; or
(4) Asset-backed issuers, as defined in Sec. 229.1101 of this
chapter.
(b) Such reports shall be transmitted promptly after the information
required by Form 6-K is made public by the issuer, by the country of its
domicile or under the laws of which it was incorporated or organized, or
by a foreign securities exchange with which the issuer has filed the
information.
(c) Reports furnished pursuant to this rule shall not be deemed to
be ``filed'' for the purpose of section 18 of the Act or otherwise
subject to the liabilities of that section.
[32 FR 7849, May 30, 1967, as amended at 44 FR 70137, Dec. 6, 1979; 47
FR 54781, Dec. 6, 1982; 50 FR 27939, July 9, 1985; 57 FR 10615, Mar. 27,
1991; 70 FR 1621, Jan. 7, 2005]
Sec. 240.13a-17 Reports of asset-backed issuers on Form 10-D
(Sec. 249.312 of this chapter).
Every asset-backed issuer subject to Sec. 240.13a-1 shall make
reports on Form 10-D (Sec. 249.312 of this chapter). Such reports shall
be filed within the period specified in Form 10-D.
[70 FR 1621, Jan. 7, 2005]
Sec. 240.13a-18 Compliance with servicing criteria for asset-backed
securities.
(a) This section applies to every class of asset-backed securities
subject to the reporting requirements of section 13(a) of the Act (15
U.S.C. 78m(a)). Terms used in this section have the
[[Page 123]]
same meaning as in Item 1101 of Regulation AB (Sec. 229.1101 of this
chapter).
(b) Reports on assessments of compliance with servicing criteria for
asset-backed securities required. With regard to a class of asset-backed
securities subject to the reporting requirements of section 13(a) of the
Act, the annual report on Form 10-K (Sec. 249.308 of this chapter) for
such class must include from each party participating in the servicing
function a report regarding its assessment of compliance with the
servicing criteria specified in paragraph (d) of Item 1122 of Regulation
AB (Sec. 229.1122(d) of this chapter), as of and for the period ending
the end of each fiscal year, with respect to asset-backed securities
transactions taken as a whole involving the party participating in the
servicing function and that are backed by the same asset type backing
the class of asset-backed securities (including the asset-backed
securities transaction that is to be the subject of the report on Form
10-K for that fiscal year).
(c) Attestation reports on assessments of compliance with servicing
criteria for asset-backed securities required. With respect to each
report included pursuant to paragraph (b) of this section, the annual
report on Form 10-K must also include a report by a registered public
accounting firm that attests to, and reports on, the assessment made by
the asserting party. The attestation report on assessment of compliance
with servicing criteria for asset-backed securities must be made in
accordance with standards for attestation engagements issued or adopted
by the Public Company Accounting Oversight Board.
Note to Sec. 240.13a-18. If multiple parties are participating in
the servicing function, a separate assessment report and attestation
report must be included for each party participating in the servicing
function. A party participating in the servicing function means any
entity (e.g., master servicer, primary servicers, trustees) that is
performing activities that address the criteria in paragraph (d) of Item
1122 of Regulation AB (Sec. 229.1122(d) of this chapter), unless such
entity's activities relate only to 5% or less of the pool assets.
[70 FR 1621, Jan. 7, 2005]
Sec. 240.13a-19 Reports by shell companies on Form 20-F.
Every foreign private issuer that was a shell company, other than a
business combination related shell company, immediately before a
transaction that causes it to cease to be a shell company shall, within
four business days of completion of that transaction, file a report on
Form 20-F (Sec. 249.220f of this chapter) containing the information
that would be required if the issuer were filing a form for registration
of securities on Form 20-F to register under the Act all classes of the
issuer's securities subject to the reporting requirements of section 13
(15 U.S.C. 78m) or section 15(d) (15 U.S.C. 78o(d)) of the Act upon
consummation of the transaction, with such information reflecting the
registrant and its securities upon consummation of the transaction.
[70 FR 42247, July 21, 2005]
Regulation 13b-2: Maintenance of Records and Preparation of Required
Reports
Sec. 240.13b2-1 Falsification of accounting records.
No person shall directly or indirectly, falsify or cause to be
falsified, any book, record or account subject to section 13(b)(2)(A) of
the Securities Exchange Act.
(15 U.S.C. 78m(b)(2); 15 U.S.C. 78m(a), 78m(b)(1), 78o(d), 78j(b),
78n(a), 78t(b), 78t(c))
[44 FR 10970, Feb. 23, 1979]
Sec. 240.13b2-2 Representations and conduct in connection with the
preparation of required reports and documents.
(a) No director or officer of an issuer shall, directly or
indirectly:
(1) Make or cause to be made a materially false or misleading
statement to an accountant in connection with; or
(2) Omit to state, or cause another person to omit to state, any
material fact necessary in order to make statements made, in light of
the circumstances under which such statements were made, not misleading,
to an accountant in connection with:
(i) Any audit, review or examination of the financial statements of
the
[[Page 124]]
issuer required to be made pursuant to this subpart; or
(ii) The preparation or filing of any document or report required to
be filed with the Commission pursuant to this subpart or otherwise.
(b)(1) No officer or director of an issuer, or any other person
acting under the direction thereof, shall directly or indirectly take
any action to coerce, manipulate, mislead, or fraudulently influence any
independent public or certified public accountant engaged in the
performance of an audit or review of the financial statements of that
issuer that are required to be filed with the Commission pursuant to
this subpart or otherwise if that person knew or should have known that
such action, if successful, could result in rendering the issuer's
financial statements materially misleading.
(2) For purposes of paragraphs (b)(1) and (c)(2) of this section,
actions that, ``if successful, could result in rendering the issuer's
financial statements materially misleading'' include, but are not
limited to, actions taken at any time with respect to the professional
engagement period to coerce, manipulate, mislead, or fraudulently
influence an auditor:
(i) To issue or reissue a report on an issuer's financial statements
that is not warranted in the circumstances (due to material violations
of generally accepted accounting principles, generally accepted auditing
standards, or other professional or regulatory standards);
(ii) Not to perform audit, review or other procedures required by
generally accepted auditing standards or other professional standards;
(iii) Not to withdraw an issued report; or
(iv) Not to communicate matters to an issuer's audit committee.
(c) In addition, in the case of an investment company registered
under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8),
or a business development company as defined in section 2(a)(48) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), no officer or
director of the company's investment adviser, sponsor, depositor,
trustee, or administrator (or, in the case of paragraph (c)(2) of this
section, any other person acting under the direction thereof) shall,
directly or indirectly:
(1)(i) Make or cause to be made a materially false or misleading
statement to an accountant in connection with; or
(ii) Omit to state, or cause another person to omit to state, any
material fact necessary in order to make statements made, in light of
the circumstances under which such statements were made, not misleading
to an accountant in connection with:
(A) Any audit, review, or examination of the financial statements of
the investment company required to be made pursuant to this subpart; or
(B) The preparation or filing of any document or report required to
be filed with the Commission pursuant to this subpart or otherwise; or
(2) Take any action to coerce, manipulate, mislead, or fraudulently
influence any independent public or certified public accountant engaged
in the performance of an audit or review of the financial statements of
that investment company that are required to be filed with the
Commission pursuant to this subpart or otherwise if that person knew or
should have known that such action, if successful, could result in
rendering the investment company's financial statements materially
misleading.
[68 FR 31830, May 28, 2003]
Regulation 13D
Source: Sections 240.13d-1 through 240.13f-1 appear at 43 FR 18495,
Apr. 28, 1978, unless otherwise noted.
ATTENTION ELECTRONIC FILERS
THIS REGULATION SHOULD BE READ IN CONJUNCTION WITH REGULATION S-T (PART
232 OF THIS CHAPTER), WHICH GOVERNS THE PREPARATION AND SUBMISSION OF
DOCUMENTS IN ELECTRONIC FORMAT. MANY PROVISIONS RELATING TO THE
PREPARATION AND SUBMISSION OF DOCUMENTS IN PAPER FORMAT CONTAINED IN
THIS REGULATION ARE SUPERSEDED BY THE PROVISIONS OF REGULATION S-T FOR
DOCUMENTS REQUIRED TO BE FILED IN ELECTRONIC FORMAT.
[[Page 125]]
Sec. 240.13d-1 Filing of Schedules 13D and 13G.
(a) Any person who, after acquiring directly or indirectly the
beneficial ownership of any equity security of a class which is
specified in paragraph (i) of this section, is directly or indirectly
the beneficial owner of more than five percent of the class shall,
within 10 days after the acquisition, file with the Commission, a
statement containing the information required by Schedule 13D (Sec.
240.13d-101).
(b)(1) A person who would otherwise be obligated under paragraph (a)
of this section to file a statement on Schedule 13D (Sec. 240.13d-101)
may, in lieu thereof, file with the Commission, a short-form statement
on Schedule 13G (Sec. 240.13d-102), Provided, That:
(i) Such person has acquired such securities in the ordinary course
of his business and not with the purpose nor with the effect of changing
or influencing the control of the issuer, nor in connection with or as a
participant in any transaction having such purpose or effect, including
any transaction subject to Rule 13d-3(b) (Sec. 240.13d-3(b)); and
(ii) Such person is:
(A) A broker or dealer registered under section 15 of the Act (15
U.S.C. 78o);
(B) A bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c);
(C) An insurance company as defined in section 3(a)(19) of the Act
(15 U.S.C. 78c);
(D) An investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C. 80a-8);
(E) Any person registered as an investment adviser under Section 203
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3) or under the
laws of any state;
(F) An employee benefit plan as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.
1001 et seq. (``ERISA'') that is subject to the provisions of ERISA, or
any such plan that is not subject to ERISA that is maintained primarily
for the benefit of the employees of a state or local government or
instrumentality, or an endowment fund;
(G) A parent holding company or control person, provided the
aggregate amount held directly by the parent or control person, and
directly and indirectly by their subsidiaries or affiliates that are not
persons specified in Sec. 240.13d-1(b)(1)(ii)(A) through (I), does not
exceed one percent of the securities of the subject class;
(H) A savings association as defined in Section 3(b) of the Federal
Deposit Insurance Act (12 U.S.C. 1813);
(I) A church plan that is excluded from the definition of an
investment company under section 3(c)(14) of the Investment Company Act
of 1940 (15 U.S.C. 80a-3); and
(J) A group, provided that all the members are persons specified in
Sec. 240.13d-1(b)(1)(ii)(A) through (I); and
(iii) Such person has promptly notified any other person (or group
within the meaning of section 13(d)(3) of the Act) on whose behalf it
holds, on a discretionary basis, securities exceeding five percent of
the class, of any acquisition or transaction on behalf of such other
person which might be reportable by that person under section 13(d) of
the Act. This paragraph only requires notice to the account owner of
information which the filing person reasonably should be expected to
know and which would advise the account owner of an obligation he may
have to file a statement pursuant to section 13(d) of the Act or an
amendment thereto.
(2) The Schedule 13G filed pursuant to paragraph (b)(1) of this
section shall be filed within 45 days after the end of the calendar year
in which the person became obligated under paragraph (b)(1) of this
section to report the person's beneficial ownership as of the last day
of the calendar year, Provided, That it shall not be necessary to file a
Schedule 13G unless the percentage of the class of equity security
specified in paragraph (i) of this section beneficially owned as of the
end of the calendar year is more than five percent; However, if the
person's direct or indirect beneficial ownership exceeds 10 percent of
the class of equity securities prior to the end of the calendar year,
the initial Schedule 13G shall be filed within 10 days after the end of
the first month in which the person's direct or indirect beneficial
ownership exceeds
[[Page 126]]
10 percent of the class of equity securities, computed as of the last
day of the month.
(c) A person who would otherwise be obligated under paragraph (a) of
this section to file a statement on Schedule 13D (Sec. 240.13d-101)
may, in lieu thereof, file with the Commission, within 10 days after an
acquisition described in paragraph (a) of this section, a short-form
statement on Schedule 13G (Sec. 240.13d-102). Provided, That the
person:
(1) Has not acquired the securities with any purpose, or with the
effect of, changing or influencing the control of the issuer, or in
connection with or as a participant in any transaction having that
purpose or effect, including any transaction subject to Sec. 240.13d-
3(b);
(2) Is not a person reporting pursuant to paragraph (b)(1) of this
section; and
(3) Is not directly or indirectly the beneficial owner of 20 percent
or more of the class.
(d) Any person who, as of the end of any calendar year, is or
becomes directly or indirectly the beneficial owner of more than five
percent of any equity security of a class specified in paragraph (i) of
this section and who is not required to file a statement under paragraph
(a) of this section by virtue of the exemption provided by Section
13(d)(6)(A) or (B) of the Act (15 U.S.C. 78m(d)(6)(A) or 78m(d)(6)(B)),
or because the beneficial ownership was acquired prior to December 22,
1970, or because the person otherwise (except for the exemption provided
by Section 13(d)(6)(C) of the Act (15 U.S.C. 78m(d)(6)(C))) is not
required to file a statement, shall file with the Commission, within 45
days after the end of the calendar year in which the person became
obligated to report under this paragraph (d), a statement containing the
information required by Schedule 13G (Sec. 240.13d-102).
(e)(1) Notwithstanding paragraphs (b) and (c) of this section and
Sec. 240.13d-2(b), a person that has reported that it is the beneficial
owner of more than five percent of a class of equity securities in a
statement on Schedule 13G (Sec. 240.13d-102) pursuant to paragraph (b)
or (c) of this section, or is required to report the acquisition but has
not yet filed the schedule, shall immediately become subject to
Sec. Sec. 240.13d-1(a) and 240.13d-2(a) and shall file a statement on
Schedule 13D (Sec. 240.13d-101) within 10 days if, and shall remain
subject to those requirements for so long as, the person:
(i) Has acquired or holds the securities with a purpose or effect of
changing or influencing control of the issuer, or in connection with or
as a participant in any transaction having that purpose or effect,
including any transaction subject to Sec. 240.13d-3(b); and
(ii) Is at that time the beneficial owner of more than five percent
of a class of equity securities described in Sec. 240.13d-1(i).
(2) From the time the person has acquired or holds the securities
with a purpose or effect of changing or influencing control of the
issuer, or in connection with or as a participant in any transaction
having that purpose or effect until the expiration of the tenth day from
the date of the filing of the Schedule 13D (Sec. 240.13d-101) pursuant
to this section, that person shall not:
(i) Vote or direct the voting of the securities described therein;
or
(ii) Acquire an additional beneficial ownership interest in any
equity securities of the issuer of the securities, nor of any person
controlling the issuer.
(f)(1) Notwithstanding paragraph (c) of this section and Sec.
240.13d-2(b), persons reporting on Schedule 13G (Sec. 240.13d-102)
pursuant to paragraph (c) of this section shall immediately become
subject to Sec. Sec. 240.13d-1(a) and 240.13d-2(a) and shall remain
subject to those requirements for so long as, and shall file a statement
on Schedule 13D (Sec. 240.13d-101) within 10 days of the date on which,
the person's beneficial ownership equals or exceeds 20 percent of the
class of equity securities.
(2) From the time of the acquisition of 20 percent or more of the
class of equity securities until the expiration of the tenth day from
the date of the filing of the Schedule 13D (Sec. 240.13d-101) pursuant
to this section, the person shall not:
(i) Vote or direct the voting of the securities described therein,
or
(ii) Acquire an additional beneficial ownership interest in any
equity securities of the issuer of the securities,
[[Page 127]]
nor of any person controlling the issuer.
(g) Any person who has reported an acquisition of securities in a
statement on Schedule 13G (Sec. 240.13d-102) pursuant to paragraph (b)
of this section, or has become obligated to report on the Schedule 13G
(Sec. 240.13d-102) but has not yet filed the Schedule, and thereafter
ceases to be a person specified in paragraph (b)(1)(ii) of this section
or determines that it no longer has acquired or holds the securities in
the ordinary course of business shall immediately become subject to
Sec. 240.13d-1(a) or Sec. 240.13d-1(c) (if the person satisfies the
requirements specified in Sec. 240.13d-1(c)), and Sec. Sec. 240.13d-2
(a), (b) or (d), and shall file, within 10 days thereafter, a statement
on Schedule 13D (Sec. 240.13d-101) or amendment to Schedule 13G, as
applicable, if the person is a beneficial owner at that time of more
than five percent of the class of equity securities.
(h) Any person who has filed a Schedule 13D (Sec. 240.13d-101)
pursuant to paragraph (e), (f) or (g) of this section may again report
its beneficial ownership on Schedule 13G (Sec. 240.13d-102) pursuant to
paragraphs (b) or (c) of this section provided the person qualifies
thereunder, as applicable, by filing a Schedule 13G (Sec. 240.13d-102)
once the person determines that the provisions of paragraph (e), (f) or
(g) of this section no longer apply.
(i) For the purpose of this regulation, the term ``equity security''
means any equity security of a class which is registered pursuant to
section 12 of that Act, or any equity security of any insurance company
which would have been required to be so registered except for the
exemption contained in section 12(g)(2)(G) of the Act, or any equity
security issued by a closed-end investment company registered under the
Investment Company Act of 1940; Provided, Such term shall not include
securities of a class of non-voting securities.
(j) For the purpose of sections 13(d) and 13(g), any person, in
determining the amount of outstanding securities of a class of equity
securities, may rely upon information set forth in the issuer's most
recent quarterly or annual report, and any current report subsequent
thereto, filed with the Commission pursuant to this Act, unless he knows
or has reason to believe that the information contained therein is
inaccurate.
(k)(1) Whenever two or more persons are required to file a statement
containing the information required by Schedule 13D or Schedule 13G with
respect to the same securities, only one statement need be filed:
Provided, That:
(i) Each person on whose behalf the statement is filed is
individually eligible to use the Schedule on which the information is
filed;
(ii) Each person on whose behalf the statement is filed is
responsible for the timely filing of such statement and any amendments
thereto, and for the completeness and accuracy of the information
concerning such person contained therein; such person is not responsible
for the completeness or accuracy of the information concerning the other
persons making the filing, unless such person knows or has reason to
believe that such information is inaccurate; and
(iii) Such statement identifies all such persons, contains the
required information with regard to each such person, indicates that
such statement is filed on behalf of all such persons, and includes, as
an exhibit, their agreement in writing that such a statement is filed on
behalf of each of them.
(2) A group's filing obligation may be satisfied either by a single
joint filing or by each of the group's members making an individual
filing. If the group's members elect to make their own filings, each
such filing should identify all members of the group but the information
provided concerning the other persons making the filing need only
reflect information which
[[Page 128]]
the filing person knows or has reason to know.
(Secs. 3(b), 13(d)(1), 13(d)(2), 13(d)(5), 13(d)(6,) 13(g)(1), 13(g)(2),
13(g)(5), 23; 48 Stat. 882, 894, 901; sec. 203(a), 49 Stat. 704; sec. 8,
49 Stat. 1379; sec. 10, 78 Stat. 88a; sec. 2, 82 Stat. 454; secs. 1, 2,
84 Stat. 1497; secs. 3, 10, 18, 89 Stat. 97, 119, 155; secs. 202, 203,
91 Stat. 1494, 1498, 1499; (15 U.S.C. 78c(b), 78m(d)(1), 78m(d)(2),
78m(d)(5), 78m(d)(6), 78m(g)(1), 78m(g)(2), 78m(g)(5), 78w))
[43 FR 18495, Apr. 28, 1978, as amended at 43 FR 29768, July 11, 1978;
43 FR 55755, Nov. 29, 1978; 44 FR 10703, Feb. 23, 1979; 63 FR 2865, Jan.
16, 1998; 63 FR 15287, Mar. 31, 1998]
Sec. 240.13d-2 Filing of amendments to Schedules 13D or 13G.
(a) If any material change occurs in the facts set forth in the
Schedule 13D (Sec. 240.13d-101) required by Sec. 240.13d-1(a),
including, but not limited to, any material increase or decrease in the
percentage of the class beneficially owned, the person or persons who
were required to file the statement shall promptly file or cause to be
filed with the Commission an amendment disclosing that change. An
acquisition or disposition of beneficial ownership of securities in an
amount equal to one percent or more of the class of securities shall be
deemed ``material'' for purposes of this section; acquisitions or
dispositions of less than those amounts may be material, depending upon
the facts and circumstances.
(b) Notwithstanding paragraph (a) of this section, and provided that
the person filing a Schedule 13G (Sec. 240.13d-102) pursuant to Sec.
240.13d-1(b) or Sec. 240.13d-1(c) continues to meet the requirements
set forth therein, any person who has filed a Schedule 13G (Sec.
240.13d-102) pursuant to Sec. 240.13d-1(b), Sec. 240.13d-1(c) or Sec.
240.13d-1(d) shall amend the statement within forty-five days after the
end of each calendar year if, as of the end of the calendar year, there
are any changes in the information reported in the previous filing on
that Schedule: Provided, however, That an amendment need not be filed
with respect to a change in the percent of class outstanding previously
reported if the change results solely from a change in the aggregate
number of securities outstanding. Once an amendment has been filed
reflecting beneficial ownership of five percent or less of the class of
securities, no additional filings are required unless the person
thereafter becomes the beneficial owner of more than five percent of the
class and is required to file pursuant to Sec. 240.13d-1.
(c) Any person relying on Sec. 240.13d-1(b) that has filed its
initial Schedule 13G (Sec. 240.13d-102) pursuant to that paragraph
shall, in addition to filing any amendments pursuant to Sec. 240.13d-
2(b), file an amendment on Schedule 13G (Sec. 240.13d-102) within 10
days after the end of the first month in which the person's direct or
indirect beneficial ownership, computed as of the last day of the month,
exceeds 10 percent of the class of equity securities. Thereafter, that
person shall, in addition to filing any amendments pursuant to Sec.
240.13d-2(b), file an amendment on Schedule 13G (Sec. 240.13d-102)
within 10 days after the end of the first month in which the person's
direct or indirect beneficial ownership, computed as of the last day of
the month, increases or decreases by more than five percent of the class
of equity securities. Once an amendment has been filed reflecting
beneficial ownership of five percent or less of the class of securities,
no additional filings are required by this paragraph (c).
(d) Any person relying on Sec. 240.13d-1(c) and has filed its
initial Schedule 13G (Sec. 240.13d-102) pursuant to that paragraph
shall, in addition to filing any amendments pursuant to Sec. 240.13d-
2(b), file an amendment on Schedule 13G (Sec. 240.13d-102) promptly
upon acquiring, directly or indirectly, greater than 10 percent of a
class of equity securities specified in Sec. 240.13d-1(d), and
thereafter promptly upon increasing or decreasing its beneficial
ownership by more than five percent of the class of equity securities.
Once an amendment has been filed reflecting beneficial ownership of five
percent or less of the class of securities, no additional filings are
required by this paragraph (d).
(e) The first electronic amendment to a paper format Schedule 13D
(Sec. 240.13d-101 of this chapter) or Schedule 13G (Sec. 240.13d-102
of this chapter) shall restate the entire text of the Schedule 13D or
13G, but previously filed paper exhibits to such Schedules are not
required to be restated electronically. See Rule 102 of Regulation S-T
(Sec. 232.102 of
[[Page 129]]
this chapter) regarding amendments to exhibits previously filed in paper
format. Notwithstanding the foregoing, if the sole purpose of filing the
first electronic Schedule 13D or 13G amendment is to report a change in
beneficial ownership that would terminate the filer's obligation to
report, the amendment need not include a restatement of the entire text
of the Schedule being amended.
Note to Sec. 240.13d-2: For persons filing a short-form statement
pursuant to Rule 13d-1(b) or (c), see also Rules 13d-1(e), (f), and (g).
(Secs. 3(b), 13(d)(1), 13(d)(2), 13(d)(5), 13(d)(6), 14(d)(1), 23; 48
Stat. 882, 894, 895, 901; sec. 203(a), 49 Stat. 704, sec. 8, 49 Stat.
1379; sec. 10, 78 Stat. 88a; secs. 2, 3, 82 Stat. 454, 455; secs. 1, 2,
3-5, 84 Stat. 1497; secs. 3, 18, 89 Stat. 97, 155 (15 U.S.C. 78c(b),
78m(d)(1), 89m(d)(2), 78m(d)(5), 78m(d)(6), 78n(d)(1), 78w); sec. 23, 48
Stat. 901; sec. 203(a), 49 Stat. 704; sec. 8, 49 Stat. 1379; sec. 10, 78
Stat. 580; sec. 18, 89 Stat. 155; secs. 102, 202, 203, 91 Stat. 1494,
1498, 1499; 15 U.S.C. 78m(g), 78w(a))
[43 FR 18495, Apr. 28, 1978, as amended at 45 FR 81558, Dec. 11, 1980;
47 FR 49964, Nov. 4, 1982; 58 FR 14683, Mar. 18, 1993; 59 FR 67764, Dec.
30, 1994; 62 FR 36459, July 8, 1997; 63 FR 2866, Jan. 16, 1998]
Sec. 240.13d-3 Determination of beneficial owner.
(a) For the purposes of sections 13(d) and 13(g) of the Act a
beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares:
(1) Voting power which includes the power to vote, or to direct the
voting of, such security; and/or,
(2) Investment power which includes the power to dispose, or to
direct the disposition of, such security.
(b) Any person who, directly or indirectly, creates or uses a trust,
proxy, power of attorney, pooling arrangement or any other contract,
arrangement, or device with the purpose of effect of divesting such
person of beneficial ownership of a security or preventing the vesting
of such beneficial ownership as part of a plan or scheme to evade the
reporting requirements of section 13(d) or (g) of the Act shall be
deemed for purposes of such sections to be the beneficial owner of such
security.
(c) All securities of the same class beneficially owned by a person,
regardless of the form which such beneficial ownership takes, shall be
aggregated in calculating the number of shares beneficially owned by
such person.
(d) Notwithstanding the provisions of paragraphs (a) and (c) of this
rule:
(1)(i) A person shall be deemed to be the beneficial owner of a
security, subject to the provisions of paragraph (b) of this rule, if
that person has the right to acquire beneficial ownership of such
security, as defined in Rule 13d-3(a) (Sec. 240.13d-3(a)) within sixty
days, including but not limited to any right to acquire: (A) Through the
exercise of any option, warrant or right; (B) through the conversion of
a security; (C) pursuant to the power to revoke a trust, discretionary
account, or similar arrangement; or (D) pursuant to the automatic
termination of a trust, discretionary account or similar arrangement;
provided, however, any person who acquires a security or power specified
in paragraphs (d)(1)(i)(A), (B) or (C), of this section, with the
purpose or effect of changing or influencing the control of the issuer,
or in connection with or as a participant in any transaction having such
purpose or effect, immediately upon such acquisition shall be deemed to
be the beneficial owner of the securities which may be acquired through
the exercise or conversion of such security or power. Any securities not
outstanding which are subject to such options, warrants, rights or
conversion privileges shall be deemed to be outstanding for the purpose
of computing the percentage of outstanding securities of the class owned
by such person but shall not be deemed to be outstanding for the purpose
of computing the percentage of the class by any other person.
(ii) Paragraph (d)(1)(i) of this section remains applicable for the
purpose of determining the obligation to file with respect to the
underlying security even though the option, warrant, right or
convertible security is of a class of equity security, as defined in
Sec. 240.13d-1(i), and may therefore give rise to a separate obligation
to file.
(2) A member of a national securities exchange shall not be deemed
to be a
[[Page 130]]
beneficial owner of securities held directly or indirectly by it on
behalf of another person solely because such member is the record holder
of such securities and, pursuant to the rules of such exchange, may
direct the vote of such securities, without instruction, on other than
contested matters or matters that may affect substantially the rights or
privileges of the holders of the securities to be voted, but is
otherwise precluded by the rules of such exchange from voting without
instruction.
(3) A person who in the ordinary course of his business is a pledgee
of securities under a written pledge agreement shall not be deemed to be
the beneficial owner of such pledged securities until the pledgee has
taken all formal steps necessary which are required to declare a default
and determines that the power to vote or to direct the vote or to
dispose or to direct the disposition of such pledged securities will be
exercised, provided, that:
(i) The pledgee agreement is bona fide and was not entered into with
the purpose nor with the effect of changing or influencing the control
of the issuer, nor in connection with any transaction having such
purpose or effect, including any transaction subject to Rule 13d-3(b);
(ii) The pledgee is a person specified in Rule 13d-1(b)(ii),
including persons meeting the conditions set forth in paragraph (G)
thereof; and
(iii) The pledgee agreement, prior to default, does not grant to the
pledgee;
(A) The power to vote or to direct the vote of the pledged
securities; or
(B) The power to dispose or direct the disposition of the pledged
securities, other than the grant of such power(s) pursuant to a pledge
agreement under which credit is extended subject to regulation T (12 CFR
220.1 to 220.8) and in which the pledgee is a broker or dealer
registered under section 15 of the act.
(4) A person engaged in business as an underwriter of securities who
acquires securities through his participation in good faith in a firm
commitment underwriting registered under the Securities Act of 1933
shall not be deemed to be the beneficial owner of such securities until
the expiration of forty days after the date of such acquisition.
(Secs. 3(b), 13(d)(1), 13(d)(2), 13(d)(5), 13(d)(6), 14(d)(1), 23; 48
Stat. 882, 894, 895, 901; sec. 203(a), 49 Stat. 704, sec. 8, 49 Stat.
1379; sec. 10, 78 Stat. 88a; secs. 2, 3, 82 Stat. 454, 455; secs. 1, 2,
3-5, 84 Stat. 1497; secs. 3, 18, 89 Stat. 97, 155 (15 U.S.C. 78c(b),
78m(d)(1), 89m(d)(2), 78m(d)(5), 78m(d)(6), 78n(d)(1), 78w)
[43 FR 18495, Apr. 28, 1978, as amended at 43 FR 29768, July 11, 1978;
63 FR 2867, Jan. 16, 1998]
Sec. 240.13d-4 Disclaimer of beneficial ownership.
Any person may expressly declare in any statement filed that the
filing of such statement shall not be construed as an admission that
such person is, for the purposes of sections 13(d) or 13(g) of the Act,
the beneficial owner of any securities covered by the statement.
(Secs. 3(b), 13(d)(1), 13(d)(2), 13(d)(5), 13(d)(6), 14(d)(1), 23; 48
Stat. 882, 894, 895, 901; sec. 203(a), 49 Stat. 704, sec. 8, 49 Stat.
1379; sec. 10, 78 Stat. 88a; secs. 2, 3, 82 Stat. 454, 455; secs. 1, 2,
3-5, 84 Stat. 1497; secs. 3, 18, 89 Stat. 97, 155 (15 U.S.C. 78c(b),
78m(d)(1), 89m(d)(2), 78m(d)(5), 78m(d)(6), 78n(d)(1), 78w)
Sec. 240.13d-5 Acquisition of securities.
(a) A person who becomes a beneficial owner of securities shall be
deemed to have acquired such securities for purposes of section 13(d)(1)
of the Act, whether such acquisition was through purchase or otherwise.
However, executors or administrators of a decedent's estate generally
will be presumed not to have acquired beneficial ownership of the
securities in the decedent's estate until such time as such executors or
administrators are qualified under local law to perform their duties.
(b)(1) When two or more persons agree to act together for the
purpose of acquiring, holding, voting or disposing of equity securities
of an issuer, the group formed thereby shall be deemed to have acquired
beneficial ownership, for purposes of sections 13(d) and (g) of the Act,
as of the date of such agreement, of all equity securities of that
issuer beneficially owned by any such persons.
(2) Notwithstanding the previous paragraph, a group shall be deemed
not to have acquired any equity securities
[[Page 131]]
beneficially owned by the other members of the group solely by virtue of
their concerted actions relating to the purchase of equity securities
directly from an issuer in a transaction not involving a public
offering: Provided, That:
(i) All the members of the group are persons specified in Rule 13d-
1(b)(1)(ii);
(ii) The purchase is in the ordinary course of each member's
business and not with the purpose nor with the effect of changing or
influencing control of the issuer, nor in connection with or as a
participant in any transaction having such purpose or effect, including
any transaction subject to Rule 13d-3(b);
(iii) There is no agreement among, or between any members of the
group to act together with respect to the issuer or its securities
except for the purpose of facilitating the specific purchase involved;
and
(iv) The only actions among or between any members of the group with
respect to the issuer or its securities subsequent to the closing date
of the non-public offering are those which are necessary to conclude
ministerial matters directly related to the completion of the offer or
sale of the securities.
(Secs. 3(b), 13(d)(1), 13(d)(2), 13(d)(5), 13(d)(6), 14(d)(1), 23; 48
Stat. 882, 894, 895, 901; sec. 203(a), 49 Stat. 704, sec. 8, 49 Stat.
1379; sec. 10, 78 Stat. 88a; secs. 2, 3, 82 Stat. 454, 455; secs. 1, 2,
3-5, 84 Stat. 1497; secs. 3, 18, 89 Stat. 97, 155 (15 U.S.C. 78c(b),
78m(d)(1), 89m(d)(2), 78m(d)(5), 78m(d)(6), 78n(d)(1), 78w))
Sec. 240.13d-6 Exemption of certain acquisitions.
The acquisition of securities of an issuer by a person who, prior to
such acquisition, was a beneficial owner of more than five percent of
the outstanding securities of the same class as those acquired shall be
exempt from section 13(d) of the Act: Provided, That:
(a) The acquisition is made pursuant to preemptive subscription
rights in an offering made to all holders of securities of the class to
which the preemptive subscription rights pertain;
(b) Such person does not acquire additional securities except
through the exercise of his pro rata share of the preemptive
subscription rights; and
(c) The acquisition is duly reported, if required, pursuant to
section 16(a) of the Act and the rules and regulations thereunder.
(Secs. 3(b), 13(d)(1), 13(d)(2), 13(d)(5), 13(d)(6), 14(d)(1), 23; 48
Stat. 882, 894, 895, 901; sec. 203(a), 49 Stat. 704, sec. 8, 49 Stat.
1379; sec. 10, 78 Stat. 88a; secs. 2, 3, 82 Stat. 454, 455; secs. 1, 2,
3-5, 84 Stat. 1497; secs. 3, 18, 89 Stat. 97, 155 (15 U.S.C. 78c(b),
78m(d)(1), 89m(d)(2), 78m(d)(5), 78m(d)(6), 78n(d)(1), 78w))
Sec. 240.13d-7 Dissemination.
One copy of the Schedule filed pursuant to Sec. Sec. 240.13d-1 and
240.13d-2 shall be sent to the issuer of the security at its principal
executive office by registered or certified mail. A copy of Schedules
filed pursuant to Sec. Sec. 240.13d-1(a) and 240.13d-2(a) shall also be
sent to each national securities exchange where the security is traded.
[63 FR 2867, Jan. 16, 1998]
Sec. 240.13d-101 Schedule 13D--Information to be included in statements
filed pursuant to Sec. 240.13d-1(a) and amendments thereto filed pursuant
to Sec. 240.13d-2(a).
Securities and Exchange Commission, Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No.--)*
________________________________________________________________________
(Name of Issuer)
________________________________________________________________________
(Title of Class of Securities)
________________________________________________________________________
(CUSIP Number)
________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
________________________________________________________________________
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule 13D,
and is filing this schedule because of Sec. Sec. 240.13d-1(e), 240.13d-
1(f) or 240.13d-1(g), check the following box. [squ]
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
Rule 13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject
[[Page 132]]
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover
page.
The information required on the remainder of this cover page shall
not be deemed to be ``filed'' for the purpose of section 18 of the
Securities Exchange Act of 1934 (``Act'') or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other
provisions of the Act (however, see the Notes).
CUSIP No.------
------------------------------------------------------------------------
(1) Names of reporting persons.........
I.R.S. Identification Nos. of above
persons (entities only)..
------------------------------------------------------------------------
(2) Check the appropriate box if a (a)
member of a group
--------------------------------
(see instructions) (b)
------------------------------------------------------------------------
(3) SEC use only.......................
------------------------------------------------------------------------
(4) Source of funds (see instructions).
------------------------------------------------------------------------
(5) Check if disclosure of legal
proceedings is required pursuant to
Items 2(d) or 2(e).
------------------------------------------------------------------------
(6) Citizenship or place of
organization.
------------------------------------------------------------------------
Number of shares beneficially owned by
each reporting person with:
(7) Sole voting power................
--------------------------------
(8) Shared voting power..............
--------------------------------
(9) Sole dispositive power...........
--------------------------------
(10) Shared dispositive power........
------------------------------------------------------------------------
(11) Aggregate amount beneficially
owned by each reporting person.
------------------------------------------------------------------------
(12) Check if the aggregate amount in
Row (11) excludes certain shares (see
instructions).
------------------------------------------------------------------------
(13) Percent of class represented by
amount in Row (11).
------------------------------------------------------------------------
(14) Type of reporting person (see
instructions).
------------------------------------------------------------------------
Page -- of -- Pages
Instructions for Cover Page
(1) Names and I.R.S. Identifiaction Numbers of Reporting Persons--
Furnish the full legal name of each person for whom the report is
filed--i.e., each person required to sign the schedule itself--including
each member of a group. Do not include the name of a person required to
be identified in the report but who is not a reporting person. Reporting
persons that are entities are also requested to furnish their I.R.S.
identification numbers, although disclosure of such numbers is
voluntary, not mandatory (see ``SPECIAL INSTRUCTIONS FOR COMPLYING WITH
SCHEDULE 13-D'' below).
(2) If any of the shares beneficially owned by a reporting person
are held as a member of the group and the membership is expressly
affirmed, please check row 2(a). If the reporting person disclaims
membership in a group or describes a relationship with other person but
does not affirm the existence of a group, please check row 2(b) (unless
it is a joint filing pursuant to Rule 13d-1(k)(1) in which case it may
not be necessary to check row 2(b)).
(3) The 3rd row is for SEC internal use; please leave blank.
(4) Classify the source of funds or other consideration used or to
be used in making the purchases as required to be disclosed pursuant to
Item 3 of Schedule 13D and insert the appropriate symbol (or symbols if
more than one is necessary) in row (4):
------------------------------------------------------------------------
Category of Source Symbol
------------------------------------------------------------------------
Subject Company (Company whose securities are SC
being acquired).
Bank......................................... BK
Affiliate (of reporting person).............. AF
Working Capital (of reporting person)........ WC
Personal Funds (of reporting person)......... PF
Other........................................ OO
------------------------------------------------------------------------
(5) If disclosure of legal proceedings or actions is required
pursuant to either Items
[[Page 133]]
2(d) or 2(e) of Schedule 13D, row 5 should be checked.
(6) Citizenship or Place of Organization--Furnish citizenship if the
named reporting person is a natural person. Otherwise, Furnish place of
organization. (See Item 2 of Schedule 13D).
(7)-(11) [Reserved]
(12) Check if the aggregate amount reported as beneficially owned in
row (11) does not include shares which the reporting person discloses in
the report but as to which beneficial ownership is disclaimed pursuant
to Rule 13d-4 [17 CFR 240.13d-4] under the Securities Exchange Act of
1934.
(13) Aggregate Amount Beneficially Owned by Each Reporting Person,
Etc.--Rows (7) through (11), inclusive, and (13) are to be completed in
accordance with the provisions of Item 5 of Schedule 13D. All
percentages are to be rounded off to nearest tenth (one place after
decimal point).
(14) Type of Reporting Person--Please classify each ``reporting
person'' according to the following breakdown and place the appropriate
symbol (or symbols, i.e., if more than one is applicable, insert all
applicable symbols) on the form:
------------------------------------------------------------------------
Category Symbol
------------------------------------------------------------------------
Broker Dealer............................... BD
Bank........................................ BK
Insurance Company........................... IC
Investment Company.......................... IV
Investment Adviser.......................... IA
Employee Benefit Plan or Endowment Fund..... EP
Parent Holding Company/Control Person....... HC
Savings Association......................... SA
Church Plan................................. CP
Corporation................................. CO
Partnership................................. PN
Individual.................................. IN
Other....................................... OO
------------------------------------------------------------------------
Notes: Attach as many copies of the second part of the cover page as
are needed, one reporting person per page.
Filing persons may, in order to avoid unnecessary duplication,
answer items on the schedules (Schedule 13D, 13G, or 14D-1) by
appropriate cross references to an item or items on the cover page(s).
This approach may only be used where the cover page item or items
provide all the disclosure required by the schedule item. Moreover, such
a use of a cover page item will result in the item becoming a part of
the schedule and accordingly being considered as ``filed'' for purposes
of section 18 of the Securities Exchange Act or otherwise subject to the
liabilities of that section of the Act.
Reporting persons may comply with their cover page filing
requirements by filing either completed copies of the blank forms
available from the Commission, printed or typed facsimiles, or computer
printed facsimiles, provided the documents filed have identical formats
to the forms prescribed in the Commission's regulations and meet
existing Securities Exchange Act rules as to such matters as clarity and
size (Securities Exchange Act Rule 12b-12).
Special Instructions for Complying With Schedule 13D
Under sections 13(d) and 23 of the Securities Exchange Act of 1934
and the rules and regulations thereunder, the Commission is authorized
to solicit the information required to be supplied by this schedule by
certain security holders of certain issuers.
Disclosure of the information specified in this schedule is
mandatory, except for I.R.S. identification numbers, disclosure of which
is voluntary. The information will be used for the primary purpose of
determining and disclosing the holdings of certain beneficial owners of
certain equity securities. This statement will be made a matter of
public record. Therefore, any information given will be available for
inspection by any member of the public.
Because of the public nature of the information, the Commission can
utilize it for a variety of purposes, including referral to other
governmental authorities or securities self-regulatory organizations for
investigatory purposes or in connection with litigation involving the
Federal securities laws or other civil, criminal or regulatory statutes
or provisions. I.R.S. identification numbers, if furnished, will assist
the Commission in identifying security holders and, therefore, in
promptly processing statements of beneficial ownership of securities.
Failure to disclose the information requested by this schedule,
except for I.R.S. identification numbers, may result in civil or
criminal action against the persons involved for violation of the
Federal securities laws and rules promulgated thereunder.
Instructions. A. The item numbers and captions of the items shall be
included but the text of the items is to be omitted. The answers to the
items shall be so prepared as to indicate clearly the coverage of the
items without referring to the text of the items. Answer every item. If
an item is inapplicable or the answer is in the negative, so state.
B. Information contained in exhibits to the statement may be
incorporated by reference in answer or partial answer to any item or
sub-item of the statement unless it would render such answer misleading,
incomplete, unclear or confusing. Material incorporated by reference
shall be clearly identified in the reference by page, paragraph, caption
or otherwise. An express statement that the specified matter is
incorporated by reference shall be made at the particular place in the
statement where the information is required. A copy of any information
or a copy of the pertinent pages of a document containing such
information which is incorporated by
[[Page 134]]
reference shall be submitted with this statement as an exhibit and shall
be deemed to be filed with the Commission for all purposes of the Act.
C. If the statement is filed by a general or limited partnership,
syndicate, or other group, the information called for by Items 2-6,
inclusive, shall be given with respect to (i) each partner of such
general partnership; (ii) each partner who is denominated as a general
partner or who functions as a general partner of such limited
partnership; (iii) each member of such syndicate or group; and (iv) each
person controlling such partner or member. If the statement is filed by
a corporation or if a person referred to in (i), (ii), (iii) or (iv) of
this Instruction is a corporation, the information called for by the
above mentioned items shall be given with respect to (a) each executive
officer and director of such corporation; (b) each person controlling
such corporation; and (c) each executive officer and director of any
corporation or other person ultimately in control of such corporation.
Item 1. Security and Issuer. State the title of the class of equity
securities to which this statement relates and the name and address of
the principal executive offices of the issuer of such securities.
Item 2. Identity and Background. If the person filing this statement
or any person enumerated in Instruction C of this statement is a
corporation, general partnership, limited partnership, syndicate or
other group of persons, state its name, the state or other place of its
organization, its principal business, the address of its principal
office and the information required by (d) and (e) of this Item. If the
person filing this statement or any person enumerated in Instruction C
is a natural person, provide the information specified in (a) through
(f) of this Item with respect to such person(s).
(a) Name;
(b) Residence or business address;
(c) Present principal occupation or employment and the name,
principal business and address of any corporation or other organization
in which such employment is conducted;
(d) Whether or not, during the last five years, such person has been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) and, if so, give the dates, nature of conviction,
name and location of court, any penalty imposed, or other disposition of
the case;
(e) Whether or not, during the last five years, such person was a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws; and,
if so, identify and describe such proceedings and summarize the terms of
such judgment, decree or final order; and
(f) Citizenship.
Item 3. Source and Amount of Funds or Other Consideration. State the
source and the amount of funds or other consideration used or to be used
in making the purchases, and if any part of the purchase price is or
will be represented by funds or other consideration borrowed or
otherwise obtained for the purpose of acquiring, holding, trading or
voting the securities, a description of the transaction and the names of
the parties thereto. Where material, such information should also be
provided with respect to prior acquisitions not previously reported
pursuant to this regulation. If the source of all or any part of the
funds is a loan made in the ordinary course of business by a bank, as
defined in section 3(a)(6) of the Act, the name of the bank shall not be
made available to the public if the person at the time of filing the
statement so requests in writing and files such request, naming such
bank, with the Secretary of the Commission. If the securities were
acquired other than by purchase, describe the method of acquisition.
Item 4. Purpose of Transaction. State the purpose or purposes of the
acquisition of securities of the issuer. Describe any plans or proposals
which the reporting persons may have which relate to or would result in:
(a) The acquisition by any person of additional securities of the
issuer, or the disposition of securities of the issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the issuer or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the issuer
or any of its subsidiaries;
(d) Any change in the present board of directors or management of
the issuer, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of the issuer;
(f) Any other material change in the issuer's business or corporate
structure, including but not limited to, if the issuer is a registered
closed-end investment company, any plans or proposals to make any
changes in its investment policy for which a vote is required by section
13 of the Investment Company Act of 1940;
(g) Changes in the issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition
of control of the issuer by any person;
(h) Causing a class of securities of the issuer to be delisted from
a national securities exchange or to cease to be authorized to
[[Page 135]]
be quoted in an inter-dealer quotation system of a registered national
securities association;
(i) A class of equity securities of the issuer becoming eligible for
termination of registration pursuant to section 12(g)(4) of the Act; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer. (a) State the
aggregate number and percentage of the class of securities identified
pursuant to Item 1 (which may be based on the number of securities
outstanding as contained in the most recently available filing with the
Commission by the issuer unless the filing person has reason to believe
such information is not current) beneficially owned (identifying those
shares which there is a right to acquire) by each person named in Item
2. The above mentioned information should also be furnished with respect
to persons who, together with any of the persons named in Item 2,
comprise a group within the meaning of section 13(d)(3) of the Act;
(b) For each person named in response to paragraph (a), indicate the
number of shares as to which there is sole power to vote or to direct
the vote, sole power to dispose or to direct the disposition, or shared
power to dispose or to direct the disposition. Provide the applicable
information required by Item 2 with respect to each person with whom the
power to vote or to direct the vote or to dispose or direct the
disposition is shared;
(c) Describe any transactions in the class of securities reported on
that were effected during the past sixty days or since the most recent
filing of Schedule 13D (Sec. 240.13d-101), whichever is less, by the
persons named in response to paragraph (a).
Instruction. The description of a transaction required by Item 5(c)
shall include, but not necessarily be limited to: (1) The identity of
the person covered by Item 5(c) who effected the transaction; (2) the
date of transaction; (3) the amount of securities involved; (4) the
price per share or unit; and (5) where and how the transaction was
effected.
(d) If any other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the
sale of, such securities, a statement to that effect should be included
in response to this item and, if such interest relates to more than five
percent of the class, such person should be identified. A listing of the
shareholders of an investment company registered under the Investment
Company Act of 1940 or the beneficiaries of an employee benefit plan,
pension fund or endowment fund is not required.
(e) If applicable, state the date on which the reporting person
ceased to be the beneficial owner of more than five percent of the class
of securities.
Instruction. For computations regarding securities which represent a
right to acquire an underlying security, see Rule 13d-3(d)(1) and the
note thereto.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer. Describe any contracts,
arrangements, understandings or relationships (legal or otherwise) among
the persons named in Item 2 and between such persons and any person with
respect to any securities of the issuer, including but not limited to
transfer or voting of any of the securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of
proxies, naming the persons with whom such contracts, arrangements,
understandings or relationships have been entered into. Include such
information for any of the securities that are pledged or otherwise
subject to a contingency the occurrence of which would give another
person voting power or investment power over such securities except that
disclosure of standard default and similar provisions contained in loan
agreements need not be included.
Item 7. Material to be Filed as Exhibits. The following shall be
filed as exhibits: Copies of written agreements relating to the filing
of joint acquisition statements as required by Rule 13d-1(k) and copies
of all written agreements, contracts, arrangements, understanding, plans
or proposals relating to: (1) The borrowing of funds to finance the
acquisition as disclosed in Item 3; (2) the acquisition of issuer
control, liquidation, sale of assets, merger, or change in business or
corporate structure, or any other matter as disclosed in Item 4; and (3)
the transfer or voting of the securities, finder's fees, joint ventures,
options, puts, calls, guarantees of loans, guarantees against loss or of
profit, or the giving or withholding of any proxy as disclosed in Item
6.
Signature. After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement
is true, complete and correct.
Date____________________________________________________________________
Signature_______________________________________________________________
Name/Title______________________________________________________________
The original statement shall be signed by each person on whose
behalf the statement is filed or his authorized representative. If the
statement is signed on behalf of a person by his authorized
representative (other than an executive officer or general partner of
the filing person), evidence of the representative's authority to sign
on behalf of such person shall be filed with the statement: Provided,
however, That a power of attorney for this purpose which is already on
file with the Commission may be incorporated by reference. The name and
any title of each person who signs the statement shall be typed or
printed beneath his signature.
[[Page 136]]
Attention--Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).
(Secs. 13(d), 13(g), 14(d), 23, 48 Stat. 894, 895, 901; sec. 8, 49 Stat.
1379; sec. 203(a), 49 Stat. 704; sec. 10, 78 Stat. 88a; secs. 2, 3, 82
Stat. 454, 455; secs. 1, 2, 3-5, 84 Stat. 1497; sec. 18, 89 Stat. 155;
secs. 202, 203, 91 Stat. 1494, 1498, 1499; 15 U.S.C. 78m(d), 78m(g),
78n(d), 78w)
[44 FR 2145, Jan. 9, 1979; 44 FR 11751, Mar. 2, 1979; 44 FR 70340, Dec.
6, 1979; 47 FR 11466, Mar. 16, 1982; 61 FR 49959, Sept. 24, 1996; 62 FR
35340, July 1, 1997; 63 FR 2867, Jan. 16, 1998; 63 FR 15287, Mar. 31,
1998]
Sec. 240.13d-102 Schedule 13G--Information to be included in statements
filed pursuant to Sec. 240.13d-1(b), (c), and (d) and amendments thereto
filed pursuant to Sec. 240.13d-2.
Securities and Exchange Commission, Washington, D.C. 20549
Schedule 13G
Under the Securities Exchange Act of 1934
(Amendment No.--)*
________________________________________________________________________
(Name of Issuer)
________________________________________________________________________
(Title of Class of Securities)
________________________________________________________________________
(CUSIP Number)
________________________________________________________________________
(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which
this Schedule is filed:
[ ] Rule 13d-1(b)
[ ] Rule 13d-1(c)
[ ] Rule 13d-1(d)
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment containing
information which would alter the disclosures provided in a prior cover
page.
The information required in the remainder of this cover page shall
not be deemed to be ``filed'' for the purpose of Section 18 of the
Securities Exchange Act of 1934 (``Act'') or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other
provisions of the Act (however, see the Notes).
CUSIP No.------
------------------------------------------------------------------------
(1) Names of reporting persons.........
I.R.S. Identification Nos. of above
persons (entities only)..
------------------------------------------------------------------------
(2) Check the appropriate box if a (a)
member of a group
--------------------------------
(see instructions) (b)
------------------------------------------------------------------------
(3) SEC use only.......................
------------------------------------------------------------------------
(4) Citizenship or place of
organization.
------------------------------------------------------------------------
Number of shares beneficially owned by
each reporting person with:
(5) Sole voting power................
--------------------------------
(6) Shared voting power..............
--------------------------------
(7) Sole dispositive power...........
--------------------------------
(8) Shared dispositive power.........
------------------------------------------------------------------------
(9) Aggregate amount beneficially owned
by each reporting person.
------------------------------------------------------------------------
(10) Check if the aggregate amount in
Row (9) excludes certain shares (see
instructions).
------------------------------------------------------------------------
(11) Percent of class represented by
amount in Row (9).
------------------------------------------------------------------------
(12) Type of reporting person (see
instructions).
------------------------------------------------------------------------
Page -- of -- Pages
Instructions for Cover Page:
(1) Names and I.R.S. Identification Numbers of Reporting Persons--
Furnish the full legal name of each person for whom the report is
filed--i.e., each person required to sign the schedule itself--including
each member of a group. Do not include the name of a person required to
be identified in the report but
[[Page 137]]
who is not a reporting person. Reporting persons that are entities are
also requested to furnish their I.R.S. identification numbers, although
disclosure of such numbers is voluntary, not mandatory (see ``SPECIAL
INSTRUCTIONS FOR COMPLYING WITH SCHEDULE 13G'', below).
(2) If any of the shares beneficially owned by a reporting person
are held as a member of a group and that membership is expressly
affirmed, please check row 2(a). If the reporting person disclaims
membership in a group or describes a relationship with other person but
does not affirm the existence of a group, please check row 2(b) [unless
it is a joint filing pursuant to Rule 13d-1(k)(1) in which case it may
not be necessary to check row 2(b)].
(3) The third row is for SEC internal use; please leave blank.
(4) Citizenship or Place of Organization--Furnish citizenship if the
named reporting person is a natural person. Otherwise, furnish place of
organization.
(5)-(9), (11) Aggregated Amount Beneficially Owned By Each Reporting
Person, etc.--Rows (5) through (9) inclusive, and (11) are to be
completed in accordance with the provisions of Item 4 of Schedule 13G.
All percentages are to be rounded off to the nearest tenth (one place
after decimal point).
(10) Check if the aggregate amount reported as beneficially owned in
row (9) does not include shares as to which beneficial ownership is
disclaimed pursuant to Rule 13d-4 [17 CFR 240.13d-4] under the
Securities Exchange Act of 1934.
(12) Type of Reporting Person--Please classify each ``reporting
person'' according to the following breakdown (see Item 3 of Schedule
13G) and place the appropriate symbol on the form:
------------------------------------------------------------------------
Category Symbol
------------------------------------------------------------------------
Broker Dealer............................... BD
Bank........................................ BK
Insurance Company........................... IC
Investment Company.......................... IV
Investment Adviser.......................... IA
Employee Benefit Plan or Endowment Fund..... EP
Parent Holding Company/Control Person....... HC
Savings Association......................... SA
Church Plan................................. CP
Corporation................................. CO
Partnership................................. PN
Individual.................................. IN
Other....................................... OO
------------------------------------------------------------------------
Notes: Attach as many copies of the second part of the cover page as
are needed, one reporting person per page.
Filing persons may, in order to avoid unnecessary duplication,
answer items on the schedules (Schedule 13D, 13G, or 14D-1) by
appropriate cross references to an item or items on the cover page(s).
This approach may only be used where the cover page item or items
provide all the disclosure required by the schedule item. Moreover, such
a use of a cover page item will result in the item becoming a part of
the schedule and accordingly being considered as ``filed'' for purposes
of section 18 of the Securities Exchange Act or otherwise subject to the
liabilities of that section of the Act.
Reporting persons may comply with their cover page filing
requirements by filing either completed copies of the blank forms
available from the Commission, printed or typed facsimiles, or computer
printed facsimiles, provided the documents filed have identical formats
to the forms prescribed in the Commission's regulations and meet
existing Securities Exchange Act rules as to such matters as clarity and
size (Securities Exchange Act Rule 12b-12).
Special Instructions for Complying With Schedule 13G
Under Sections 13 (d), 13(g) and 23 of the Securities Exchange Act
of 1934 and the rules and regulations thereunder, the Commission is
authorized to solicit the information required to be supplied by this
schedule by certain security holders of certain issuers.
Disclosure of the information specified in this schedule is
mandatory, except for I.R.S. identification numbers, disclosure of which
is voluntary. The information will be used for the primary purpose of
determining and disclosing the holdings of certain beneficial owners of
certain equity securities. This statement will be made a matter of
public record. Therefore, any information given will be available for
inspection by any member of the public.
Because of the public nature of the information, the Commission can
use it for a variety of purposes, including referral to other
governmental authorities or securities self-regulatory organizations for
investigatory purposes or in connection with litigation involving the
Federal securities laws or other civil, criminal or regulatory statutes
or provisions. I.R.S. identification numbers, if furnished, will assist
the Commission in identifying security holders and, therefore, in
promptly processing statements of beneficial ownership of securities.
Failure to disclose the information requested by this schedule,
except for I.R.S. identification numbers, may result in civil or
criminal action against the persons involved for violation of the
Federal securities laws and rules promulgated thereunder.
Instructions. A. Statements filed pursuant to Rule 13d-1(b)
containing the information required by this schedule shall be filed not
later than February 14 following the calendar year covered by the
statement or within the time specified in Rules 13d-1(b)(2) and 13d-
2(c). Statements filed pursuant to Rule 13d-1(d) shall be filed within
the time specified in Rules 13d-1(c), 13d-2(b) and 13d-2(d).
[[Page 138]]
Statements filed pursuant to Rule 13d-1(c) shall be filed not later than
February 14 following the calendar year covered by the statement
pursuant to Rules 13d-1(d) and 13d-2(b).
B. Information contained in a form which is required to be filed by
rules under section 13(f) (15 U.S.C. 78m(f)) for the same calendar year
as that covered by a statement on this schedule may be incorporated by
reference in response to any of the items of this schedule. If such
information is incorporated by reference in this schedule, copies of the
relevant pages of such form shall be filed as an exhibit to this
schedule.
C. The item numbers and captions of the items shall be included but
the text of the items is to be omitted. The answers to the items shall
be so prepared as to indicate clearly the coverage of the items without
referring to the text of the items. Answer every item. If an item is
inapplicable or the answer is in the negative, so state.
Item 1(a) Name of issuer:------
Item 1(b) Address of issuer's principal executive offices:--------
2(a) Name of person filing:
________________________________________________________________________
2(b) Address or principal business office or, if none, residence:
________________________________________________________________________
2(c) Citizenship:
________________________________________________________________________
2(d) Title of class of securities:
________________________________________________________________________
2(e) CUSIP No.:
________________________________________________________________________
Item 3. If this statement is filed pursuant to Sec. Sec. 240.13d-
1(b) or 240.13d-2(b) or (c), check whether the person filing is a:
(a) [ ] Broker or dealer registered under section 15 of the Act (15
U.S.C. 78o).
(b) [ ] Bank as defined in section 3(a)(6) of the Act (15 U.S.C.
78c).
(c) [ ] Insurance company as defined in section 3(a)(19) of the Act
(15 U.S.C. 78c).
(d) [ ] Investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C 80a-8).
(e) [ ] An investment adviser in accordance with Sec. 240.13d-
1(b)(1)(ii)(E);
(f) [ ] An employee benefit plan or endowment fund in accordance
with Sec. 240.13d-1(b)(1)(ii)(F);
(g) [ ] A parent holding company or control person in accordance
with Sec. 240.13d-1(b)(1)(ii)(G);
(h) [ ] A savings associations as defined in Section 3(b) of the
Federal Deposit Insurance Act (12 U.S.C. 1813);
(i) [ ] A church plan that is excluded from the definition of an
investment company under section 3(c)(14) of the Investment Company Act
of 1940 (15 U.S.C. 80a-3);
(j) [ ] Group, in accordance with Sec. 240.13d-1(b)(1)(ii)(J).
Item 4. Ownership
Provide the following information regarding the aggregate number and
percentage of the class of securities of the issuer identified in Item
1.
(a) Amount beneficially owned: ----------.
(b) Percent of class: ----------.
(c) Number of shares as to which the person has:
(i) Sole power to vote or to direct the vote ----------.
(ii) Shared power to vote or to direct the vote ----------.
(iii) Sole power to dispose or to direct the disposition of --------
--.
(iv) Shared power to dispose or to direct the disposition of ------
----.
Instruction. For computations regarding securities which represent a
right to acquire an underlying security see Sec. 240.13d-3(d)(1).
Item 5. Ownership of 5 Percent or Less of a Class. If this statement
is being filed to report the fact that as of the date hereof the
reporting person has ceased to be the beneficial owner of more than 5
percent of the class of securities, check the following [ ].
Instruction. Dissolution of a group requires a response to this
item.
Item 6. Ownership of More than 5 Percent on Behalf of Another
Person. If any other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the
sale of, such securities, a statement to that effect should be included
in response to this item and, if such interest relates to more than 5
percent of the class, such person should be identified. A listing of the
shareholders of an investment company registered under the Investment
Company Act of 1940 or the beneficiaries of employee benefit plan,
pension fund or endowment fund is not required.
Item 7. Identification and Classification of the Subsidiary Which
Acquired the Security Being Reported on by the Parent Holding Company or
Control Person. If a parent holding company or control person has filed
this schedule pursuant to Rule 13d-1(b)(1)(ii)(G), so indicate under
Item 3(g) and attach an exhibit stating the identity and the Item 3
classification of the relevant subsidiary. If a parent holding company
or control person has filed this schedule pursuant to Rule 13d-1(c) or
Rule 13d-1(d), attach an exhibit stating the identification of the
relevant subsidiary.
Item 8. Identification and Classification of Members of the Group
If a group has filed this schedule pursuant to Sec. 240.13d-
1(b)(1)(ii)(J), so indicate under Item 3(j) and attach an exhibit
stating the identity and Item 3 classification of each member of the
group. If a group has filed this schedule pursuant to Rule 13d-1(c) or
Rule
[[Page 139]]
13d-1(d), attach an exhibit stating the identity of each member of the
group.
Item 9. Notice of Dissolution of Group. Notice of dissolution of a
group may be furnished as an exhibit stating the date of the dissolution
and that all further filings with respect to transactions in the
security reported on will be filed, if required, by members of the
group, in their individual capacity. See Item 5.
Item 10. Certifications
(a) The following certification shall be included if the statement
is filed pursuant to Sec. 240.13d-1(b):
By signing below I certify that, to the best of my knowledge and
belief, the securities referred to above were acquired and are held in
the ordinary course of business and were not acquired and are not held
for the purpose of or with the effect of changing or influencing the
control of the issuer of the securities and were not acquired and are
not held in connection with or as a participant in any transaction
having that purpose or effect.
(b) The following certification shall be included if the statement
is filed pursuant to Sec. 240.13d-1(c):
By signing below I certify that, to the best of my knowledge and
belief, the securities referred to above were not acquired and are not
held for the purpose of or with the effect of changing or influencing
the control of the issuer of the securities and were not acquired and
are not held in connection with or as a participant in any transaction
having that purpose or effect.
Signature. After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement
is true, complete and correct.
Dated:----
----------.
Signature.
----------.
Name/Title.
The original statement shall be signed by each person on whose
behalf the statement is filed or his authorized representative. If the
statement is signed on behalf of a person by his authorized
representative other than an executive officer or general partner of the
filing person, evidence of the representative's authority to sign on
behalf of such person shall be filed with the statement, Provided,
however, That a power of attorney for this purpose which is already on
file with the Commission may be incorporated by reference. The name and
any title of each person who signs the statement shall be typed or
printed beneath his signature.
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
Rule 13d-7 for other parties for whom copies are to be sent.
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (see 18 U.S.C. 1001).
(Secs. 3(b), 13(d)(1), 13(d)(2), 13(d)(5), 13(d)(6), 13(g)(1), 13(g)(2),
13(g)(5), 23, 48 Stat. 882, 894, 901; sec. 203(a), 49 Stat. 704; sec. 8,
49 Stat. 1379; sec. 10, 78 Stat. 88a; sec. 2, 82 Stat. 454; secs. 1, 2,
84 Stat. 1497; secs. 3, 10, 18, 89 Stat. 97, 119, 155; secs. 202, 203,
91 Stat. 1494, 1498, 1499; (15 U.S.C. 78c(b), 78m(d)(1), 78m(d)(2),
78m(d)(5), 78m(d)(6), 78m(g)(1), 78m(g)(2), 78m(g)(5), 78w))
[43 FR 18499, Apr. 28, 1978, as amended at 43 FR 55756, Nov. 29, 1978;
44 FR 2148, Jan. 9, 1979; 44 FR 11751, Mar. 2, 1979; 61 FR 49959, Sept.
24, 1996; 62 FR 35340, July 1, 1997; 63 FR 2867, Jan. 16, 1998; 63 FR
15287, Mar. 31, 1998]
Sec. 240.13e-1 Purchase of securities by the issuer during a
third-party tender offer.
An issuer that has received notice that it is the subject of a
tender offer made under Section 14(d)(1) of the Act (15 U.S.C. 78n),
that has commenced under Sec. 240.14d-2 must not purchase any of its
equity securities during the tender offer unless the issuer first:
(a) Files a statement with the Commission containing the following
information:
(1) The title and number of securities to be purchased;
(2) The names of the persons or classes of persons from whom the
issuer will purchase the securities;
(3) The name of any exchange, inter-dealer quotation system or any
other market on or through which the securities will be purchased;
(4) The purpose of the purchase;
(5) Whether the issuer will retire the securities, hold the
securities in its treasury, or dispose of the securities. If the issuer
intends to dispose of the securities, describe how it intends to do so;
and
(6) The source and amount of funds or other consideration to be used
to make the purchase. If the issuer borrows any funds or other
consideration to make the purchase or enters any agreement for the
purpose of acquiring, holding, or trading the securities, describe the
transaction and agreement and identify the parties; and
(b) Pays the fee required by Sec. 240.0-11 when it files the
initial statement.
(c) This section does not apply to periodic repurchases in
connection
[[Page 140]]
with an employee benefit plan or other similar plan of the issuer so
long as the purchases are made in the ordinary course and not in
response to the tender offer.
Instruction to Sec. 240.13e-1:
File eight copies if paper filing is permitted.
[64 FR 61452, Nov. 10, 1999]
Sec. 240.13e-2 [Reserved]
Sec. 240.13e-3 Going private transactions by certain issuers or their
affiliates.
(a) Definitions. Unless indicated otherwise or the context otherwise
requires, all terms used in this section and in Schedule 13E-3 [Sec.
240.13e-100] shall have the same meaning as in the Act or elsewhere in
the General Rules and Regulations thereunder. In addition, the following
definitions apply:
(1) An affiliate of an issuer is a person that directly or
indirectly through one or more intermediaries controls, is controlled
by, or is under common control with such issuer. For the purposes of
this section only, a person who is not an affiliate of an issuer at the
commencement of such person's tender offer for a class of equity
securities of such issuer will not be deemed an affiliate of such issuer
prior to the stated termination of such tender offer and any extensions
thereof;
(2) The term purchase means any acquisition for value including, but
not limited to, (i) any acquisition pursuant to the dissolution of an
issuer subsequent to the sale or other disposition of substantially all
the assets of such issuer to its affiliate, (ii) any acquisition
pursuant to a merger, (iii) any acquisition of fractional interests in
connection with a reverse stock split, and (iv) any acquisition subject
to the control of an issuer or an affiliate of such issuer;
(3) A Rule 13e-3 transaction is any transaction or series of
transactions involving one or more of the transactions described in
paragraph (a)(3)(i) of this section which has either a reasonable
likelihood or a purpose of producing, either directly or indirectly, any
of the effects described in paragraph (a)(3)(ii) of this section;
(i) The transactions referred to in paragraph (a)(3) of this section
are:
(A) A purchase of any equity security by the issuer of such security
or by an affiliate of such issuer;
(B) A tender offer for or request or invitation for tenders of any
equity security made by the issuer of such class of securities or by an
affiliate of such issuer; or
(C) A solicitation subject to Regulation 14A [Sec. Sec. 240.14a-1
to 240.14b-1] of any proxy, consent or authorization of, or a
distribution subject to Regulation 14C [Sec. Sec. 240.14c-1 to 14c-101]
of information statements to, any equity security holder by the issuer
of the class of securities or by an affiliate of such issuer, in
connection with: a merger, consolidation, reclassification,
recapitalization, reorganization or similar corporate transaction of an
issuer or between an issuer (or its subsidiaries) and its affiliate; a
sale of substantially all the assets of an issuer to its affiliate or
group of affiliates; or a reverse stock split of any class of equity
securities of the issuer involving the purchase of fractional interests.
(ii) The effects referred to in paragraph (a)(3) of this section
are:
(A) Causing any class of equity securities of the issuer which is
subject to section 12(g) or section 15(d) of the Act to be held of
record by less than 300 persons; or
(B) Causing any class of equity securities of the issuer which is
either listed on a national securities exchange or authorized to be
quoted in an inter-dealer quotation system of a registered national
securities association to be neither listed on any national securities
exchange nor authorized to be quoted on an inter-dealer quotation system
of any registered national securities association.
(4) An unaffiliated security holder is any security holder of an
equity security subject to a Rule 13e-3 transaction who is not an
affiliate of the issuer of such security.
(b) Application of section to an issuer (or an affiliate of such
issuer) subject to section 12 of the Act. (1) It shall be a fraudulent,
deceptive or manipulative act or practice, in connection with a Rule
13e-3 transaction, for an issuer which has a class of equity securities
registered pursuant to section 12 of the
[[Page 141]]
Act or which is a closed-end investment company registered under the
Investment Company Act of 1940, or an affiliate of such issuer, directly
or indirectly
(i) To employ any device, scheme or artifice to defraud any person;
(ii) To make any untrue statement of a material fact or to omit to
state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading;
or
(iii) To engage in any act, practice or course of business which
operates or would operate as a fraud or deceit upon any person.
(2) As a means reasonably designed to prevent fraudulent, deceptive
or manipulative acts or practices in connection with any Rule 13e-3
transaction, it shall be unlawful for an issuer which has a class of
equity securities registered pursuant to section 12 of the Act, or an
affiliate of such issuer, to engage, directly or indirectly, in a Rule
13e-3 transaction unless:
(i) Such issuer or affiliate complies with the requirements of
paragraphs (d), (e) and (f) of this section; and
(ii) The Rule 13e-3 transaction is not in violation of paragraph
(b)(1) of this section.
(c) Application of section to an issuer (or an affiliate of such
issuer) subject to section 15(d) of the Act. (1) It shall be unlawful as
a fraudulent, deceptive or manipulative act or practice for an issuer
which is required to file periodic reports pursuant to Section 15(d) of
the Act, or an affiliate of such issuer, to engage, directly or
indirectly, in a Rule 13e-3 transaction unless such issuer or affiliate
complies with the requirements of paragraphs (d), (e) and (f) of this
section.
(2) An issuer or affiliate which is subject to paragraph (c)(1) of
this section and which is soliciting proxies or distributing information
statements in connection with a transaction described in paragraph
(a)(3)(i)(A) of this section may elect to use the timing procedures for
conducting a solicitation subject to Regulation 14A (Sec. Sec. 240.14a-
1 to 240.14b-1) or a distribution subject to Regulation 14C (Sec. Sec.
240.14c-1 to 240.14c-101) in complying with paragraphs (d), (e) and (f)
of this section, provided that if an election is made, such solicitation
or distribution is conducted in accordance with the requirements of the
respective regulations, including the filing of preliminary copies of
soliciting materials or an information statement at the time specified
in Regulation 14A or 14C, respectively.
(d) Material required to be filed. The issuer or affiliate engaging
in a Rule 13e-3 transaction must file with the Commission:
(1) A Schedule 13E-3 (Sec. 240.13e-100), including all exhibits;
(2) An amendment to Schedule 13E-3 reporting promptly any material
changes in the information set forth in the schedule previously filed;
and
(3) A final amendment to Schedule 13E-3 reporting promptly the
results of the Rule 13e-3 transaction.
(e) Disclosure of information to security holders. (1) In addition
to disclosing the information required by any other applicable rule or
regulation under the federal securities laws, the issuer or affiliate
engaging in a Sec. 240.13e-3 transaction must disclose to security
holders of the class that is the subject of the transaction, as
specified in paragraph (f) of this section, the following:
(i) The information required by Item 1 of Schedule 13E-3 (Sec.
240.13e-100) (Summary Term Sheet);
(ii) The information required by Items 7, 8 and 9 of Schedule 13E-3,
which must be prominently disclosed in a ``Special Factors'' section in
the front of the disclosure document;
(iii) A prominent legend on the outside front cover page that
indicates that neither the Securities and Exchange Commission nor any
state securities commission has: approved or disapproved of the
transaction; passed upon the merits or fairness of the transaction; or
passed upon the adequacy or accuracy of the disclosure in the document.
The legend also must make it clear that any representation to the
contrary is a criminal offense;
(iv) The information concerning appraisal rights required by Sec.
229.1016(f) of this chapter; and
[[Page 142]]
(v) The information required by the remaining items of Schedule 13E-
3, except for Sec. 229.1016 of this chapter (exhibits), or a fair and
adequate summary of the information.
Instructions to paragraph (e)(1):
1. If the Rule 13e-3 transaction also is subject to Regulation 14A
(Sec. Sec. 240.14a-1 through 240.14b-2) or 14C (Sec. Sec. 240.14c-1
through 240.14c-101), the registration provisions and rules of the
Securities Act of 1933, Regulation 14D or Sec. 240.13e-4, the
information required by paragraph (e)(1) of this section must be
combined with the proxy statement, information statement, prospectus or
tender offer material sent or given to security holders.
2. If the Rule 13e-3 transaction involves a registered securities
offering, the legend required by Sec. 229.501(b)(7) of this chapter
must be combined with the legend required by paragraph (e)(1)(iii) of
this section.
3. The required legend must be written in clear, plain language.
(2) If there is any material change in the information previously
disclosed to security holders, the issuer or affiliate must disclose the
change promptly to security holders as specified in paragraph
(f)(1)(iii) of this section.
(f) Dissemination of information to security holders. (1) If the
Rule 13e-3 transaction involves a purchase as described in paragraph
(a)(3)(i)(A) of this section or a vote, consent, authorization, or
distribution of information statements as described in paragraph
(a)(3)(i)(C) of this section, the issuer or affiliate engaging in the
Rule 13e-3 transaction shall:
(i) Provide the information required by paragraph (e) of this
section: (A) In accordance with the provisions of any applicable Federal
or State law, but in no event later than 20 days prior to: any such
purchase; any such vote, consent or authorization; or with respect to
the distribution of information statements, the meeting date, or if
corporate action is to be taken by means of the written authorization or
consent of security holders, the earliest date on which corporate action
may be taken: Provided, however, That if the purchase subject to this
section is pursuant to a tender offer excepted from Rule 13e-4 by
paragraph (g)(5) of Rule 13e-4, the information required by paragraph
(e) of this section shall be disseminated in accordance with paragraph
(e) of Rule 13e-4 no later than 10 business days prior to any purchase
pursuant to such tender offer, (B) to each person who is a record holder
of a class of equity securities subject to the Rule 13e-3 transaction as
of a date not more than 20 days prior to the date of dissemination of
such information.
(ii) If the issuer or affiliate knows that securities of the class
of securities subject to the Rule 13e-3 transaction are held of record
by a broker, dealer, bank or voting trustee or their nominees, such
issuer or affiliate shall (unless Rule 14a-13(a) [Sec. 240.14a-13(a)]
or 14c-7 [Sec. 240.14c-7] is applicable) furnish the number of copies
of the information required by paragraph (e) of this section that are
requested by such persons (pursuant to inquiries by or on behalf of the
issuer or affiliate), instruct such persons to forward such information
to the beneficial owners of such securities in a timely manner and
undertake to pay the reasonable expenses incurred by such persons in
forwarding such information; and
(iii) Promptly disseminate disclosure of material changes to the
information required by paragraph (d) of this section in a manner
reasonably calculated to inform security holders.
(2) If the Rule 13e-3 transaction is a tender offer or a request or
invitation for tenders of equity securities which is subject to
Regulation 14D [Sec. Sec. 240.14d-1 to 240.14d-101] or Rule 13e-4
[Sec. 240.13e-4], the tender offer containing the information required
by paragraph (e) of this section, and any material change with respect
thereto, shall be published, sent or given in accordance with Regulation
14D or Rule 13e-4, respectively, to security holders of the class of
securities being sought by the issuer or affiliate.
(g) Exceptions. This section shall not apply to:
(1) Any Rule 13e-3 transaction by or on behalf of a person which
occurs within one year of the date of termination of a tender offer in
which such person was the bidder and became an affiliate of the issuer
as a result of such tender offer: Provided, That the consideration
offered to unaffiliated security holders in such Rule 13e-3 transaction
is at least equal to the highest consideration offered during such
tender offer and Provided further, That:
[[Page 143]]
(i) If such tender offer was made for any or all securities of a
class of the issuer;
(A) Such tender offer fully disclosed such person's intention to
engage in a Rule 13e-3 transaction, the form and effect of such
transaction and, to the extent known, the proposed terms thereof; and
(B) Such Rule 13e-3 transaction is substantially similar to that
described in such tender offer; or
(ii) If such tender offer was made for less than all the securities
of a class of the issuer:
(A) Such tender offer fully disclosed a plan of merger, a plan of
liquidation or a similar binding agreement between such person and the
issuer with respect to a Rule 13e-3 transaction; and
(B) Such Rule 13e-3 transaction occurs pursuant to the plan of
merger, plan of liquidation or similar binding agreement disclosed in
the bidder's tender offer.
(2) Any Rule 13e-3 transaction in which the security holders are
offered or receive only an equity security Provided, That:
(i) Such equity security has substantially the same rights as the
equity security which is the subject of the Rule 13e-3 transaction
including, but not limited to, voting, dividends, redemption and
liquidation rights except that this requirement shall be deemed to be
satisfied if unaffiliated security holders are offered common stock;
(ii) Such equity security is registered pursuant to section 12 of
the Act or reports are required to be filed by the issuer thereof
pursuant to section 15(d) of the Act; and
(iii) If the security which is the subject of the Rule 13e-3
transaction was either listed on a national securities exchange or
authorized to be quoted in an interdealer quotation system of a
registered national securities association, such equity security is
either listed on a national securities exchange or authorized to be
quoted in an inter-dealer quotation system of a registered national
securities association.
(3) Transactions by a holding company registered under the Public
Utility Holding Company Act of 1935 in compliance with the provisions of
that Act;
(4) Redemptions, calls or similar purchases of an equity security by
an issuer pursuant to specific provisions set forth in the instrument(s)
creating or governing that class of equity securities; or
(5) Any solicitation by an issuer with respect to a plan of
reorganization under Chapter XI of the Bankruptcy Act, as amended, if
made after the entry of an order approving such plan pursuant to section
1125(b) of that Act and after, or concurrently with, the transmittal of
information concerning such plan as required by section 1125(b) of that
Act.
(6) Any tender offer or business combination made in compliance with
Sec. 230.802 of this chapter, Sec. 240.13e-4(h)(8) or Sec. 240.14d-
1(c).
(Sec. 17(a), 19(a), 48 Stat. 84, 85; secs. 3(b), 10(b), 13(e), 14(a),
14(d), 14(e), 23(a), 48 Stat. 882, 894, 895, 891, 901; sec. 209, 48
Stat. 908; sec. 203(a), 49 Stat. 704; sec. 8, 49 Stat. 1379; sec. 10, 68
Stat. 686; sec. 5, 78 Stat. 569, 570; secs. 2, 3, 82 Stat. 454, 455;
secs. 1, 2, 3-5, 84 Stat. 1497; secs. 3, 18, 89 Stat. 97, 155; 15 U.S.C.
77g(a), 77s(a), 78c(b), 78j(b), 78m(e), 78n(a), 78n(c), 78n(e), 78w(a);
secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85, secs. 205, 209, 48
Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 88 Stat. 685; sec. 1, 79
Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13, 14, 15(d), 23(a),
48 Stat. 892, 895, 901; secs. 1, 3, 8, 49 Stat. 1375, 1377, 1379; sec
203(a), 49 Stat. 704; sec. 202, 68 Stat. 686; secs. 3, 4, 5, 6, 78 Stat.
565-568, 569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1,
2, 3-5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10,
18, 89 Stat. 117, 118, 119, 155; sec. 308(b), 90 Stat. 57; secs. 202,
203, 204, 81 Stat. 1494, 1498, 1499, 1500; 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a), 78l, 78m, 78n, 78o(d), 78w(a); secs. 3(b), 9(a)(6), 10(b),
13(e), 14(e) and 23(a) of the Act, 15 U.S.C. 78c(b), 78i(a), 78j(b),
78m(e), 78n(e) and 78w(a))
[44 FR 46741, Aug. 8, 1979, as amended at 47 FR 11466, Mar. 16, 1982; 48
FR 19877, May 3, 1983; 48 FR 34253, July 28, 1983; 51 FR 42059, Nov. 20,
1986; 61 FR 24656, May 15, 1996; 64 FR 61403, 64 FR 61452, Nov. 10,
1999]
Sec. 240.13e-4 Tender offers by issuers.
(a) Definitions. Unless the context otherwise requires, all terms
used in this section and in Schedule TO (Sec. 240.14d-100) shall have
the same meaning as in the Act or elsewhere in the General Rules and
Regulations thereunder. In addition, the following definitions shall
apply:
[[Page 144]]
(1) The term issuer means any issuer which has a class of equity
security registered pursuant to section 12 of the Act, or which is
required to file periodic reports pursuant to section 15(d) of the Act,
or which is a closed-end investment company registered under the
Investment Company Act of 1940.
(2) The term issuer tender offer refers to a tender offer for, or a
request or invitation for tenders of, any class of equity security, made
by the issuer of such class of equity security or by an affiliate of
such issuer.
(3) As used in this section and in Schedule TO (Sec. 240.14d-100),
the term business day means any day, other than Saturday, Sunday, or a
Federal holiday, and shall consist of the time period from 12:01 a.m.
through 12:00 midnight Eastern Time. In computing any time period under
this Rule or Schedule 13E-4, the date of the event that begins the
running of such time period shall be included except that if such event
occurs on other than a business day such period shall begin to run on
and shall include the first business day thereafter.
(4) The term commencement means 12:01 a.m. on the date that the
issuer or affiliate has first published, sent or given the means to
tender to security holders. For purposes of this section, the means to
tender includes the transmittal form or a statement regarding how the
transmittal form may be obtained.
(5) The term termination means the date after which securities may
not be tendered pursuant to an issuer tender offer.
(6) The term security holders means holders of record and beneficial
owners of securities of the class of equity security which is the
subject of an issuer tender offer.
(7) The term security position listing means, with respect to the
securities of any issuer held by a registered clearing agency in the
name of the clearing agency or its nominee, a list of those participants
in the clearing agency on whose behalf the clearing agency holds the
issuer's securities and of the participants' respective positions in
such securities as of a specified date.
(b) Filing, disclosure and dissemination. As soon as practicable on
the date of commencement of the issuer tender offer, the issuer or
affiliate making the issuer tender offer must comply with:
(1) The filing requirements of paragraph (c)(2) of this section;
(2) The disclosure requirements of paragraph (d)(1) of this section;
and
(3) The dissemination requirements of paragraph (e) of this section.
(c) Material required to be filed. The issuer or affiliate making
the issuer tender offer must file with the Commission:
(1) All written communications made by the issuer or affiliate
relating to the issuer tender offer, from and including the first public
announcement, as soon as practicable on the date of the communication;
(2) A Schedule TO (Sec. 240.14d-100), including all exhibits;
(3) An amendment to Schedule TO (Sec. 240.14d-100) reporting
promptly any material changes in the information set forth in the
schedule previously filed; and
(4) A final amendment to Schedule TO (Sec. 240.14d-100) reporting
promptly the results of the issuer tender offer.
Instructions to Sec. 240.13e-4(c):
1. Pre-commencement communications must be filed under cover of
Schedule TO (Sec. 240.14d-100) and the box on the cover page of the
schedule must be marked.
2. Any communications made in connection with an exchange offer
registered under the Securities Act of 1933 need only be filed under
Sec. 230.425 of this chapter and will be deemed filed under this
section.
3. Each pre-commencement written communication must include a
prominent legend in clear, plain language advising security holders to
read the tender offer statement when it is available because it contains
important information. The legend also must advise investors that they
can get the tender offer statement and other filed documents for free at
the Commission's web site and explain which documents are free from the
issuer.
4. See Sec. Sec. 230.135, 230.165 and 230.166 of this chapter for
pre-commencement communications made in connection with registered
exchange offers.
5. ``Public announcement'' is any oral or written communication by
the issuer, affiliate or any person authorized to act on their behalf
that is reasonably designed to, or has the effect of, informing the
public or security holders in general about the issuer tender offer.
[[Page 145]]
(d) Disclosure of tender offer information to security holders. (1)
The issuer or affiliate making the issuer tender offer must disclose, in
a manner prescribed by paragraph (e)(1) of this section, the following:
(i) The information required by Item 1 of Schedule TO (Sec.
240.14d-100) (summary term sheet); and
(ii) The information required by the remaining items of Schedule TO
for issuer tender offers, except for Item 12 (exhibits), or a fair and
adequate summary of the information.
(2) If there are any material changes in the information previously
disclosed to security holders, the issuer or affiliate must disclose the
changes promptly to security holders in a manner specified in paragraph
(e)(3) of this section.
(3) If the issuer or affiliate disseminates the issuer tender offer
by means of summary publication as described in paragraph (e)(1)(iii) of
this section, the summary advertisement must not include a transmittal
letter that would permit security holders to tender securities sought in
the offer and must disclose at least the following information:
(i) The identity of the issuer or affiliate making the issuer tender
offer;
(ii) The information required by Sec. 229.1004(a)(1) and Sec.
229.1006(a) of this chapter;
(iii) Instructions on how security holders can obtain promptly a
copy of the statement required by paragraph (d)(1) of this section, at
the issuer or affiliate's expense; and
(iv) A statement that the information contained in the statement
required by paragraph (d)(1) of this section is incorporated by
reference.
(e) Dissemination of tender offers to security holders. An issuer
tender offer will be deemed to be published, sent or given to security
holders if the issuer or affiliate making the issuer tender offer
complies fully with one or more of the methods described in this
section.
(1) For issuer tender offers in which the consideration offered
consists solely of cash and/or securities exempt from registration under
section 3 of the Securities Act of 1933 (15 U.S.C. 77c):
(i) Dissemination of cash issuer tender offers by long-form
publication: By making adequate publication of the information required
by paragraph (d)(1) of this section in a newspaper or newspapers, on the
date of commencement of the issuer tender offer.
(ii) Dissemination of any issuer tender offer by use of stockholder
and other lists:
(A) By mailing or otherwise furnishing promptly a statement
containing the information required by paragraph (d)(1) of this section
to each security holder whose name appears on the most recent
stockholder list of the issuer;
(B) By contacting each participant on the most recent security
position listing of any clearing agency within the possession or access
of the issuer or affiliate making the issuer tender offer, and making
inquiry of each participant as to the approximate number of beneficial
owners of the securities sought in the offer that are held by the
participant;
(C) By furnishing to each participant a sufficient number of copies
of the statement required by paragraph (d)(1) of this section for
transmittal to the beneficial owners; and
(D) By agreeing to reimburse each participant promptly for its
reasonable expenses incurred in forwarding the statement to beneficial
owners.
(iii) Dissemination of certain cash issuer tender offers by summary
publication:
(A) If the issuer tender offer is not subject to Sec. 240.13e-3, by
making adequate publication of a summary advertisement containing the
information required by paragraph (d)(3) of this section in a newspaper
or newspapers, on the date of commencement of the issuer tender offer;
and
(B) By mailing or otherwise furnishing promptly the statement
required by paragraph (d)(1) of this section and a transmittal letter to
any security holder who requests a copy of the statement or transmittal
letter.
Instruction to paragraph (e)(1): For purposes of paragraphs
(e)(1)(i) and (e)(1)(iii) of this section, adequate publication of the
issuer tender offer may require publication in a newspaper with a
national circulation, a
[[Page 146]]
newspaper with metropolitan or regional circulation, or a combination of
the two, depending upon the facts and circumstances involved.
(2) For tender offers in which the consideration consists solely or
partially of securities registered under the Securities Act of 1933, a
registration statement containing all of the required information,
including pricing information, has been filed and a preliminary
prospectus or a prospectus that meets the requirements of Section 10(a)
of the Securities Act (15 U.S.C. (15 U.S.C. 77j(a)), including a letter
of transmittal, is delivered to security holders. However, for going-
private transactions (as defined by Sec. 240.13e-3) and roll-up
transactions (as described by Item 901 of Regulation S-K (Sec. 229.901
of this chapter)), a registration statement registering the securities
to be offered must have become effective and only a prospectus that
meets the requirements of Section 10(a) of the Securities Act may be
delivered to security holders on the date of commencement.
Instructions to paragraph (e)(2):
1. If the prospectus is being delivered by mail, mailing on the date
of commencement is sufficient.
2. A preliminary prospectus used under this section may not omit
information under Sec. 230.430 or Sec. 230.430A of this chapter.
3. If a preliminary prospectus is used under this section and the
issuer must disseminate material changes, the tender offer must remain
open for the period specified in paragraph (e)(3) of this section.
4. If a preliminary prospectus is used under this section, tenders
may be requested in accordance with Sec. 230.162(a) of this chapter.
(3) If a material change occurs in the information published, sent
or given to security holders, the issuer or affiliate must disseminate
promptly disclosure of the change in a manner reasonably calculated to
inform security holders of the change. In a registered securities offer
where the issuer or affiliate disseminates the preliminary prospectus as
permitted by paragraph (e)(2) of this section, the offer must remain
open from the date that material changes to the tender offer materials
are disseminated to security holders, as follows:
(i) Five business days for a prospectus supplement containing a
material change other than price or share levels;
(ii) Ten business days for a prospectus supplement containing a
change in price, the amount of securities sought, the dealer's
soliciting fee, or other similarly significant change;
(iii) Ten business days for a prospectus supplement included as part
of a post-effective amendment; and
(iv) Twenty business days for a revised prospectus when the initial
prospectus was materially deficient.
(f) Manner of making tender offer. (1) The issuer tender offer,
unless withdrawn, shall remain open until the expiration of:
(i) At least twenty business days from its commencement; and
(ii) At least ten business days from the date that notice of an
increase or decrease in the percentage of the class of securities being
sought or the consideration offered or the dealer's soliciting fee to be
given is first published, sent or given to security holders.
Provided, however, That, for purposes of this paragraph, the acceptance
for payment by the issuer or affiliate of an additional amount of
securities not to exceed two percent of the class of securities that is
the subject of the tender offer shall not be deemed to be an increase.
For purposes of this paragraph, the percentage of a class of securities
shall be calculated in accordance with section 14(d)(3) of the Act.
(2) The issuer or affiliate making the issuer tender offer shall
permit securities tendered pursuant to the issuer tender offer to be
withdrawn:
(i) At any time during the period such issuer tender offer remains
open; and
(ii) If not yet accepted for payment, after the expiration of forty
business days from the commencement of the issuer tender offer.
(3) If the issuer or affiliate makes a tender offer for less than
all of the outstanding equity securities of a class, and if a greater
number of securities is tendered pursuant thereto than the issuer or
affiliate is bound or willing to take up and pay for, the securities
taken up and paid for shall be taken up and paid for as nearly as may be
pro rata, disregarding fractions, according to the number of securities
tendered by
[[Page 147]]
each security holder during the period such offer remains open;
Provided, however, That this provision shall not prohibit the issuer or
affiliate making the issuer tender offer from:
(i) Accepting all securities tendered by persons who own,
beneficially or of record, an aggregate of not more than a specified
number which is less than one hundred shares of such security and who
tender all their securities, before prorating securities tendered by
others; or
(ii) Accepting by lot securities tendered by security holders who
tender all securities held by them and who, when tendering their
securities, elect to have either all or none or at least a minimum
amount or none accepted, if the issuer or affiliate first accepts all
securities tendered by security holders who do not so elect;
(4) In the event the issuer or affiliate making the issuer tender
increases the consideration offered after the issuer tender offer has
commenced, such issuer or affiliate shall pay such increased
consideration to all security holders whose tendered securities are
accepted for payment by such issuer or affiliate.
(5) The issuer or affiliate making the tender offer shall either pay
the consideration offered, or return the tendered securities, promptly
after the termination or withdrawal of the tender offer.
(6) Until the expiration of at least ten business days after the
date of termination of the issuer tender offer, neither the issuer nor
any affiliate shall make any purchases, otherwise than pursuant to the
tender offer, of:
(i) Any security which is the subject of the issuer tender offer, or
any security of the same class and series, or any right to purchase any
such securities; and
(ii) In the case of an issuer tender offer which is an exchange
offer, any security being offered pursuant to such exchange offer, or
any security of the same class and series, or any right to purchase any
such security.
(7) The time periods for the minimum offering periods pursuant to
this section shall be computed on a concurrent as opposed to a
consecutive basis.
(8) No issuer or affiliate shall make a tender offer unless:
(i) The tender offer is open to all security holders of the class of
securities subject to the tender offer; and
(ii) The consideration paid to any security holder pursuant to the
tender offer is the highest consideration paid to any other security
holder during such tender offer.
(9) Paragraph (f)(8)(i) of this section shall not:
(i) Affect dissemination under paragraph (e) of this section; or
(ii) Prohibit an issuer or affiliate from making a tender offer
excluding all security holders in a state where the issuer or affiliate
is prohibited from making the tender offer by administrative or judicial
action pursuant to a state statute after a good faith effort by the
issuer or affiliate to comply with such statute.
(10) Paragraph (f)(8)(ii) of this section shall not prohibit the
offer of more than one type of consideration in a tender offer, provided
that:
(i) Security holders are afforded equal right to elect among each of
the types of consideration offered; and
(ii) The highest consideration of each type paid to any security
holder is paid to any other security holder receiving that type of
consideration.
(11) If the offer and sale of securities constituting consideration
offered in an issuer tender offer is prohibited by the appropriate
authority of a state after a good faith effort by the issuer or
affiliate to register or qualify the offer and sale of such securities
in such state:
(i) The issuer or affiliate may offer security holders in such state
an alternative form of consideration; and
(ii) Paragraph (f)(10) of this section shall not operate to require
the issuer or affiliate to offer or pay the alternative form of
consideration to security holders in any other state.
(12) Electronic filings. If the issuer or affiliate is an electronic
filer, the minimum offering periods set forth in paragraph (f)(1) of
this section shall be tolled for any period during which it fails to
file in electronic format, absent a hardship exemption (Sec. Sec.
232.201 and 232.202 of this chapter), the Schedule
[[Page 148]]
TO (Sec. 240.14d-100), the tender offer material specified in Item
1016(a)(1) of Regulation M-A (Sec. 229.1016(a)(1) of this chapter), and
any amendments thereto. If such documents were filed in paper pursuant
to a hardship exemption (see Sec. 232.201 and Sec. 232.202 of this
chapter), the minimum offering periods shall be tolled for any period
during which a required confirming electronic copy of such Schedule and
tender offer material is delinquent.
(g) The requirements of section 13(e) (1) of the Act and Rule 13e-4
and Schedule TO (Sec. 240.14d-100) thereunder shall be deemed satisfied
with respect to any issuer tender offer, including any exchange offer,
where the issuer is incorporated or organized under the laws of Canada
or any Canadian province or territory, is a foreign private issuer, and
is not an investment company registered or required to be registered
under the Investment Company Act of 1940, if less than 40 percent of the
class of securities that is the subject of the tender offer is held by
U. S. holders, and the tender offer is subject to, and the issuer
complies with, the laws, regulations and policies of Canada and/or any
of its provinces or territories governing the conduct of the offer
(unless the issuer has received an exemption(s) from, and the issuer
tender offer does not comply with, requirements that otherwise would be
prescribed by this section), provided that:
(1) Where the consideration for an issuer tender offer subject to
this paragraph consists solely of cash, the entire disclosure document
or documents required to be furnished to holders of the class of
securities to be acquired shall be filed with the Commission on Schedule
13E-4F (Sec. 240.13e-102) and disseminated to shareholders residing in
the United States in accordance with such Canadian laws, regulations and
policies; or
(2) Where the consideration for an issuer tender offer subject to
this paragraph includes securities to be issued pursuant to the offer,
any registration statement and/or prospectus relating thereto shall be
filed with the Commission along with the Schedule 13E-4F referred to in
paragraph (g)(1) of this section, and shall be disseminated, together
with the home jurisdiction document(s) accompanying such Schedule, to
shareholders of the issuer residing in the United States in accordance
with such Canadian laws, regulations and policies.
Note: Notwithstanding the grant of an exemption from one or more of
the applicable Canadian regulatory provisions imposing requirements that
otherwise would be prescribed by this section, the issuer tender offer
will be eligible to proceed in accordance with the requirements of this
section if the Commission by order determines that the applicable
Canadian regulatory provisions are adequate to protect the interest of
investors.
(h) This section shall not apply to:
(1) Calls or redemptions of any security in accordance with the
terms and conditions of its governing instruments;
(2) Offers to purchase securities evidenced by a scrip certificate,
order form or similar document which represents a fractional interest in
a share of stock or similar security;
(3) Offers to purchase securities pursuant to a statutory procedure
for the purchase of dissenting security holders' securities;
(4) Any tender offer which is subject to section 14(d) of the Act;
(5) Offers to purchase from security holders who own an aggregate of
not more than a specified number of shares that is less than one
hundred: Provided, however, That:
(i) The offer complies with paragraph (f)(8)(i) of this section with
respect to security holders who own a number of shares equal to or less
than the specified number of shares, except that an issuer can elect to
exclude participants in a plan as that term is defined in Sec. 242.100
of this chapter, or to exclude security holders who do not own their
shares as of a specified date determined by the issuer; and
(ii) The offer complies with paragraph (f)(8)(ii) of this section or
the consideration paid pursuant to the offer is determined on the basis
of a uniformly applied formula based on the market price of the subject
security;
(6) An issuer tender offer made solely to effect a rescission offer:
Provided, however, That the offer is registered under the Securities Act
of 1933 (15 U.S.C. 77a et seq.), and the consideration is equal to the
price paid by each
[[Page 149]]
security holder, plus legal interest if the issuer elects to or is
required to pay legal interest;
(7) Offers by closed-end management investment companies to
repurchase equity securities pursuant to Sec. 270.23c-3 of this
chapter;
(8) Cross-border tender offers (Tier I). Any issuer tender offer
(including any exchange offer) where the issuer is a foreign private
issuer as defined in Sec. 240.3b-4 if the following conditions are
satisfied.
(i) Except in the case of an issuer tender offer which is commenced
during the pendency of a tender offer made by a third party in reliance
on Sec. 240.14d-1(c), U.S. holders do not hold more than 10 percent of
the class of securities sought in the offer (as determined under
Instruction 2 to paragraph (h)(8) and paragraph (i) of this section);
and
(ii) The issuer or affiliate must permit U.S. holders to participate
in the offer on terms at least as favorable as those offered any other
holder of the same class of securities that is the subject of the offer;
however:
(A) Registered exchange offers. If the issuer or affiliate offers
securities registered under the Securities Act of 1933 (15 U.S.C. 77a et
seq.), the issuer or affiliate need not extend the offer to security
holders in those states or jurisdictions that prohibit the offer or sale
of the securities after the issuer or affiliate has made a good faith
effort to register or qualify the offer and sale of securities in that
state or jurisdiction, except that the issuer or affiliate must offer
the same cash alternative to security holders in any such state or
jurisdiction that it has offered to security holders in any other state
or jurisdiction.
(B) Exempt exchange offers. If the issuer or affiliate offers
securities exempt from registration under Sec. 230.802 of this chapter,
the issuer or affiliate need not extend the offer to security holders in
those states or jurisdictions that require registration or
qualification, except that the issuer or affiliate must offer the same
cash alternative to security holders in any such state or jurisdiction
that it has offered to security holders in any other state or
jurisdiction.
(C) Cash only consideration. The issuer or affiliate may offer U.S.
holders cash only consideration for the tender of the subject
securities, notwithstanding the fact that the issuer or affiliate is
offering security holders outside the United States a consideration that
consists in whole or in part of securities of the issuer or affiliate,
if the issuer or affiliate has a reasonable basis for believing that the
amount of cash is substantially equivalent to the value of the
consideration offered to non-U.S. holders, and either of the following
conditions are satisfied:
(1) The offered security is a ``margin security'' within the meaning
of Regulation T (12 CFR 220.2) and the issuer or affiliate undertakes to
provide, upon the request of any U.S. holder or the Commission staff,
the closing price and daily trading volume of the security on the
principal trading market for the security as of the last trading day of
each of the six months preceding the announcement of the offer and each
of the trading days thereafter; or
(2) If the offered security is not a ``margin security'' within the
meaning of Regulation T (12 CFR 220.2), the issuer or affiliate
undertakes to provide, upon the request of any U.S. holder or the
Commission staff, an opinion of an independent expert stating that the
cash consideration offered to U.S. holders is substantially equivalent
to the value of the consideration offered security holders outside the
United States.
(D) Disparate tax treatment. If the issuer or affiliate offers
``loan notes'' solely to offer sellers tax advantages not available in
the United States and these notes are neither listed on any organized
securities market nor registered under the Securities Act of 1933 (15
U.S.C. 77a et seq.), the loan notes need not be offered to U.S. holders.
(iii) Informational documents. (A) If the issuer or affiliate
publishes or otherwise disseminates an informational document to the
holders of the securities in connection with the issuer tender offer
(including any exchange offer), the issuer or affiliate must furnish
that informational document, including any amendments thereto, in
English, to the Commission on Form CB (Sec. 249.480 of this chapter) by
the first
[[Page 150]]
business day after publication or dissemination. If the issuer or
affiliate is a foreign company, it must also file a Form F-X (Sec.
239.42 of this chapter) with the Commission at the same time as the
submission of Form CB to appoint an agent for service in the United
States.
(B) The issuer or affiliate must disseminate any informational
document to U.S. holders, including any amendments thereto, in English,
on a comparable basis to that provided to security holders in the home
jurisdiction.
(C) If the issuer or affiliate disseminates by publication in its
home jurisdiction, the issuer or affiliate must publish the information
in the United States in a manner reasonably calculated to inform U.S.
holders of the offer.
(iv) An investment company registered or required to be registered
under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.),
other than a registered closed-end investment company, may not use this
paragraph (h)(8); or
(9) Any other transaction or transactions, if the Commission, upon
written request or upon its own motion, exempts such transaction or
transactions, either unconditionally, or on specified terms and
conditions, as not constituting a fraudulent, deceptive or manipulative
act or practice comprehended within the purpose of this section.
(i) Cross-border tender offers (Tier II). Any issuer tender offer
(including any exchange offer) that meets the conditions in paragraph
(i)(1) of this section shall be entitled to the exemptive relief
specified in paragraph (i)(2) of this section provided that such issuer
tender offer complies with all the requirements of this section other
than those for which an exemption has been specifically provided in
paragraph (i)(2) of this section:
(1) Conditions. (i) The issuer is a foreign private issuer as
defined in Sec. 240.3b-4 and is not an investment company registered or
required to be registered under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.), other than a registered closed-end investment
company; and
(ii) Except in the case of an issuer tender offer which is commenced
during the pendency of a tender offer made by a third party in reliance
on Sec. 240.14d-1(d), U.S. holders do not hold more than 40 percent of
the class of securities sought in the offer (as determined under
Instruction 2 to paragraphs (h)(8) and (i) of this section).
(2) Exemptions. The issuer tender offer shall comply with all
requirements of this section other than the following:
(i) Equal treatment--loan notes. If the issuer or affiliate offers
loan notes solely to offer sellers tax advantages not available in the
United States and these notes are neither listed on any organized
securities market nor registered under the Securities Act (15 U.S.C. 77a
et seq.), the loan notes need not be offered to U.S. holders,
notwithstanding paragraph (f)(8) and (h)(9) of this section.
(ii) Equal treatment--separate U.S. and foreign offers.
Notwithstanding the provisions of paragraph (f)(8) of this section, an
issuer or affiliate conducting an issuer tender offer meeting the
conditions of paragraph (i)(1) of this section may separate the offer
into two offers: One offer made only to U.S. holders and another offer
made only to non-U.S. holders. The offer to U.S. holders must be made on
terms at least as favorable as those offered any other holder of the
same class of securities that is the subject of the tender offer.
(iii) Notice of extensions. Notice of extensions made in accordance
with the requirements of the home jurisdiction law or practice will
satisfy the requirements of Sec. 240.14e-1(d).
(iv) Prompt payment. Payment made in accordance with the
requirements of the home jurisdiction law or practice will satisfy the
requirements of Sec. 240.14e-1(c).
Instructions to paragraph (h)(8) and (i) of this section:
1. Home jurisdiction means both the jurisdiction of the issuer's
incorporation, organization or chartering and the principal foreign
market where the issuer's securities are listed or quoted.
2. U.S. holder means any security holder resident in the United
States. To determine the percentage of outstanding securities held by
U.S. holders:
[[Page 151]]
i. Calculate the U.S. ownership as of 30 days before the
commencement of the issuer tender offer;
ii. Include securities underlying American Depositary Shares
convertible or exchangeable into the securities that are the subject of
the tender offer when calculating the number of subject securities
outstanding, as well as the number held by U.S. holders. Exclude from
the calculations other types of securities that are convertible or
exchangeable into the securities that are the subject of the tender
offer, such as warrants, options and convertible securities. Exclude
from those calculations securities held by persons who hold more than 10
percent of the subject securities;
iii. Use the method of calculating record ownership in Sec.
240.12g3-2(a), except that your inquiry as to the amount of securities
represented by accounts of customers resident in the United States may
be limited to brokers, dealers, banks and other nominees located in the
United States, your jurisdiction of incorporation, and the jurisdiction
that is the primary trading market for the subject securities, if
different than your jurisdiction of incorporation;
iv. If, after reasonable inquiry, you are unable to obtain
information about the amount of securities represented by accounts of
customers resident in the United States, you may assume, for purposes of
this definition, that the customers are residents of the jurisdiction in
which the nominee has its principal place of business; and
v. Count securities as beneficially owned by residents of the United
States as reported on reports of beneficial ownership that are provided
to you or publicly filed and based on information otherwise provided to
you.
3. United States. United States means the United States of America,
its territories and possessions, any State of the United States, and the
District of Columbia.
4. The exemptions provided by paragraphs (h)(8) and (i) of this
section are not available for any securities transaction or series of
transactions that technically complies with paragraph (h)(8) or (i) of
this section but are part of a plan or scheme to evade the provisions of
this section.
(j)(1) It shall be a fraudulent, deceptive or manipulative act or
practice, in connection with an issuer tender offer, for an issuer or an
affiliate of such issuer, in connection with an issuer tender offer:
(i) To employ any device, scheme or artifice to defraud any person;
(ii) To make any untrue statement of a material fact or to omit to
state a material fact necessary in order to make the statements made, in
the light of the circumstances under which they were made, not
misleading; or
(iii) To engage in any act, practice or course of business which
operates or would operate as a fraud or deceit upon any person.
(2) As a means reasonably designed to prevent fraudulent, deceptive
or manipulative acts or practices in connection with any issuer tender
offer, it shall be unlawful for an issuer or an affiliate of such issuer
to make an issuer tender offer unless:
(i) Such issuer or affiliate complies with the requirements of
paragraphs (b), (c), (d), (e) and (f) of this section; and
(ii) The issuer tender offer is not in violation of paragraph (j)(1)
of this section.
[44 FR 49410, Aug. 22, 1979, as amended at 47 FR 11467, Mar. 16, 1982;
47 FR 54780, Dec. 6, 1982; 48 FR 34253, July 28, 1983; 51 FR 3034, Jan.
23, 1986; 51 FR 25882, July 17, 1986; 51 FR 32630, Sept. 15, 1986; 56 FR
30069, July 1, 1991; 58 FR 14683, Mar. 18, 1993; 58 FR 19343, Apr. 14,
1993; 61 FR 24656, May 15, 1996; 61 FR 68589, Dec. 30, 1996; 62 FR 544,
Jan. 3, 1997; 62 FR 11323, Mar. 12, 1997; 62 FR 36459, July 8, 1997; 64
FR 61403, 61453 Nov. 10, 1999]
Sec. 240.13e-100 Schedule 13E-3, Transaction statement under section
13(e) of the Securities Exchange Act of 1934 and Rule 13e-3
(Sec. 240.13e-3) thereunder.
Securities and Exchange Commission,
Washington, D.C. 20549
Rule 13e-3 Transaction Statement under Section 13(e) of the Securities
Exchange Act of 1934 (Amendment No. --)
________________________________________________________________________
(Name of the Issuer)
________________________________________________________________________
(Names of Persons Filing Statement)
________________________________________________________________________
(Title of Class of Securities)
________________________________________________________________________
(CUSIP Number of Class of Securities)
________________________________________________________________________
(Name, Address, and Telephone Numbers of Person Authorized to Receive
Notices and Communications on Behalf of the Persons Filing Statement)
This statement is filed in connection with (check the appropriate
box):
a. [ ] The filing of solicitation materials or an information
statement subject to Regulation 14A (Sec. Sec. 240.14a-1 through
240.14b-2), Regulation 14C (Sec. Sec. 240.14c-1 through 240.14c-
[[Page 152]]
101) or Rule 13e-3(c) (Sec. 240.13e-3(c)) under the Securities Exchange
Act of 1934 (``the Act'').
b. [ ] The filing of a registration statement under the Securities
Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [ ]
Check the following box if the filing is a final amendment reporting
the results of the transaction [ ]
Calculation of Filing Fee
------------------------------------------------------------------------
Transaction valuation * Amount of filing fee
------------------------------------------------------------------------
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check the box if any part of the fee is offset as provided by
Sec. 240.0-11(a)(2) and identify the filing with which the offsetting
fee was previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:_________________________________________________
Form or Registration No.:_______________________________________________
Filing Party:___________________________________________________________
Date Filed:_____________________________________________________________
General Instructions:
A. File eight copies of the statement, including all exhibits, with
the Commission if paper filing is permitted.
B. This filing must be accompanied by a fee payable to the
Commission as required by Sec. 240.0-11(b).
C. If the statement is filed by a general or limited partnership,
syndicate or other group, the information called for by Items 3, 5, 6,
10 and 11 must be given with respect to: (i) Each partner of the general
partnership; (ii) each partner who is, or functions as, a general
partner of the limited partnership; (iii) each member of the syndicate
or group; and (iv) each person controlling the partner or member. If the
statement is filed by a corporation or if a person referred to in (i),
(ii), (iii) or (iv) of this Instruction is a corporation, the
information called for by the items specified above must be given with
respect to: (a) Each executive officer and director of the corporation;
(b) each person controlling the corporation; and (c) each executive
officer and director of any corporation or other person ultimately in
control of the corporation.
D. Depending on the type of Rule 13e-3 transaction (Sec. 240.13e-
3(a)(3)), this statement must be filed with the Commission:
1. At the same time as filing preliminary or definitive soliciting
materials or an information statement under Regulations 14A or 14C of
the Act;
2. At the same time as filing a registration statement under the
Securities Act of 1933;
3. As soon as practicable on the date a tender offer is first
published, sent or given to security holders; or
4. At least 30 days before any purchase of securities of the class
of securities subject to the Rule 13e-3 transaction, if the transaction
does not involve a solicitation, an information statement, the
registration of securities or a tender offer, as described in paragraphs
1, 2 or 3 of this Instruction; and
5. If the Rule 13e-3 transaction involves a series of transactions,
the issuer or affiliate must file this statement at the time indicated
in paragraphs 1 through 4 of this Instruction for the first transaction
and must amend the schedule promptly with respect to each subsequent
transaction.
E. If an item is inapplicable or the answer is in the negative, so
state. The statement published, sent or given to security holders may
omit negative and not applicable responses, except that responses to
Items 7, 8 and 9 of this schedule must be provided in full. If the
schedule includes any information that is not published, sent or given
to security holders, provide that information or specifically
incorporate it by reference under the appropriate item number and
heading in the schedule. Do not recite the text of disclosure
requirements in the schedule or any document published, sent or given to
security holders. Indicate clearly the coverage of the requirements
without referring to the text of the items.
F. Information contained in exhibits to the statement may be
incorporated by reference in answer or partial answer to any item unless
it would render the answer misleading, incomplete, unclear or confusing.
A copy of any information that is incorporated by reference or a copy of
the pertinent pages of a document containing the information must be
submitted with this statement as an exhibit, unless it was previously
filed with the Commission electronically on EDGAR. If an exhibit
contains information responding to more than one item in the schedule,
all information in that exhibit may be incorporated by reference once in
response to the several items in the schedule for which it provides an
answer. Information incorporated by reference is deemed filed with the
Commission for all purposes of the Act.
G. If the Rule 13e-3 transaction also involves a transaction subject
to Regulation 14A (Sec. Sec. 240.14a-1 through 240.14b-2) or 14C
(Sec. Sec. 240.14c-1 through 240.14c-101) of the Act, the registration
of securities under the Securities Act of 1933 and the General Rules and
Regulations of that Act, or a tender offer subject to Regulation 14D
(Sec. Sec. 240.14d-1
[[Page 153]]
through 240.14d-101) or Sec. 240.13e-4, this statement must incorporate
by reference the information contained in the proxy, information,
registration or tender offer statement in answer to the items of this
statement.
H. The information required by the items of this statement is
intended to be in addition to any disclosure requirements of any other
form or schedule that may be filed with the Commission in connection
with the Rule 13e-3 transaction. If those forms or schedules require
less information on any topic than this statement, the requirements of
this statement control.
I. If the Rule 13e-3 transaction involves a tender offer, then a
combined statement on Schedules 13E-3 and TO may be filed with the
Commission under cover of Schedule TO (Sec. 240.14d-100). See
Instruction J of Schedule TO (Sec. 240.14d-100).
J. Amendments disclosing a material change in the information set
forth in this statement may omit any information previously disclosed in
this statement.
Item 1. Summary Term Sheet
Furnish the information required by Item 1001 of Regulation M-A
(Sec. 229.1001 of this chapter) unless information is disclosed to
security holders in a prospectus that meets the requirements of Sec.
230.421(d) of this chapter.
Item 2. Subject Company Information
Furnish the information required by Item 1002 of Regulation M-A
(Sec. 229.1002 of this chapter).
Item 3. Identity and Background of Filing Person
Furnish the information required by Item 1003(a) through (c) of
Regulation M-A (Sec. 229.1003 of this chapter).
Item 4. Terms of the Transaction
Furnish the information required by Item 1004(a) and (c) through (f)
of Regulation M-A (Sec. 229.1004 of this chapter).
Item 5. Past Contacts, Transactions, Negotiations and Agreements
Furnish the information required by Item 1005(a) through (c) and (e)
of Regulation M-A (Sec. 229.1005 of this chapter).
Item 6. Purposes of the Transaction and Plans or Proposals
Furnish the information required by Item 1006(b) and (c)(1) through
(8) of Regulation M-A (Sec. 229.1006 of this chapter).
Instruction to Item 6: In providing the information specified in
Item 1006(c) for this item, discuss any activities or transactions that
would occur after the Rule 13e-3 transaction.
Item 7. Purposes, Alternatives, Reasons and Effects
Furnish the information required by Item 1013 of Regulation M-A
(Sec. 229.1013 of this chapter).
Item 8. Fairness of the Transaction
Furnish the information required by Item 1014 of Regulation M-A
(Sec. 229.1014 of this chapter).
Item 9. Reports, Opinions, Appraisals and Negotiations
Furnish the information required by Item 1015 of Regulation M-A
(Sec. 229.1015 of this chapter).
Item 10. Source and Amounts of Funds or Other Consideration
Furnish the information required by Item 1007 of Regulation M-A
(Sec. 229.1007 of this chapter).
Item 11. Interest in Securities of the Subject Company
Furnish the information required by Item 1008 of Regulation M-A
(Sec. 229.1008 of this chapter).
Item 12. The Solicitation or Recommendation
Furnish the information required by Item 1012(d) and (e) of
Regulation M-A (Sec. 229.1012 of this chapter).
Item 13. Financial Statements
Furnish the information required by Item 1010(a) through (b) of
Regulation M-A (Sec. 229.1010 of this chapter) for the issuer of the
subject class of securities.
Instructions to Item 13:
1. The disclosure materials disseminated to security holders may
contain the summarized financial information required by Item 1010(c) of
Regulation M-A (Sec. 229.1010 of this chapter) instead of the financial
information required by Item 1010(a) and (b). In that case, the
financial information required by Item 1010(a) and (b) of Regulation M-A
must be disclosed directly or incorporated by reference in the
statement. If summarized financial information is disseminated to
security holders, include appropriate instructions on how more complete
financial information can be obtained. If the summarized financial
information is prepared on the basis of a comprehensive body of
accounting principles other than U.S. GAAP, the summarized financial
information must be accompanied by a reconciliation as described in
Instruction 2.
2. If the financial statements required by this Item are prepared on
the basis of a comprehensive body of accounting principles
[[Page 154]]
other than U.S. GAAP, provide a reconciliation to U.S. GAAP in
accordance with Item 17 of Form 20-F (Sec. 249.220f of this chapter).
3. The filing person may incorporate by reference financial
statements contained in any document filed with the Commission, solely
for the purposes of this schedule, if: (a) The financial statements
substantially meet the requirements of this Item; (b) an express
statement is made that the financial statements are incorporated by
reference; (c) the matter incorporated by reference is clearly
identified by page, paragraph, caption or otherwise; and (d) if the
matter incorporated by reference is not filed with this Schedule, an
indication is made where the information may be inspected and copies
obtained. Financial statements that are required to be presented in
comparative form for two or more fiscal years or periods may not be
incorporated by reference unless the material incorporated by reference
includes the entire period for which the comparative data is required to
be given. See General Instruction F to this Schedule.
Item 14. Persons/Assets, Retained, Employed, Compensated or Used
Furnish the information required by Item 1009 of Regulation M-A
(Sec. 229.1009 of this chapter).
Item 15. Additional Information
Furnish the information required by Item 1011(b) of Regulation M-A
(Sec. 229.1011 of this chapter).
Item 16. Exhibits
File as an exhibit to the Schedule all documents specified in Item
1016(a) through (d), (f) and (g) of Regulation M-A (Sec. 229.1016 of
this chapter).
Signature. After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
________________________________________________________________________
(Signature)
________________________________________________________________________
(Name and title)
________________________________________________________________________
(Date)
Instruction to Signature: The statement must be signed by the filing
person or that person's authorized representative. If the statement is
signed on behalf of a person by an authorized representative (other than
an executive officer of a corporation or general partner of a
partnership), evidence of the representative's authority to sign on
behalf of the person must be filed with the statement. The name and any
title of each person who signs the statement must be typed or printed
beneath the signature. See Sec. 240.12b-11 with respect to signature
requirements.
[64 FR 61454, Nov. 10, 1999]
Sec. 240.13e-101 [Reserved]
Sec. 240.13e-102 Schedule 13E-4F. Tender offer statement pursuant to
section 13(e) (1) of the Securities Exchange Act of 1934 and
Sec. 240.13e-4 thereunder.
Securities and Exchange Commission
Washington, DC 20549
Schedule 13E-4F
Issuer Tender Offer Statement Pursuant to Section 13(e)(1) of the
Securities Exchange Act of 1934
[Amendment No. ----]
________________________________________________________________________
(Exact name of Issuer as specified in its charter)
________________________________________________________________________
(Translation of Issuer's Name into English (if applicable) )
________________________________________________________________________
(Jurisdiction of Issuer's Incorporation or Organization)
________________________________________________________________________
(Name(s) of Person(s) Filing Statement)
________________________________________________________________________
(Title of Class of Securities)
________________________________________________________________________
(CUSIP Number of Class of Securities) (if applicable)
________________________________________________________________________
(Name, address (including zip code) and telephone number (including
area code) of person authorized to receive notices and communications on
behalf of the person(s) filing statement)
________________________________________________________________________
(Date tender offer first published, sent or given to
securityholders)
Calculation of Filing Fee *
Transaction Valuation
Amount of Filing Fee
* Set forth the amount on which the filing fee is calculated and
state how it was determined. See General Instruction II. C. for rules
governing the calculation of the filing fee.
[ ] Check box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee
was previously paid. Identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its filing.
Amount Previously Paid: --------
Registration No.: --------
Filing Party:
________________________________________________________________________
Form: -------- Date Filed: --------
[[Page 155]]
General Instructions
I. Eligibility Requirements for Use of Schedule 13E-4F
A. Schedule 13E-4F may be used by any foreign private issuer if: (1)
The issuer is incorporated or organized under the laws of Canada or any
Canadian province or territory; (2) the issuer is making a cash tender
or exchange offer for the issuer's own securities; and (3) less than 40
percent of the class of such issuer's securities outstanding that is the
subject of the tender offer is held by U.S. holders. The calculation of
securities held by U.S. holders shall be made as of the end of the
issuer's last quarter or, if such quarter terminated within 60 days of
the filing date, as of the end of the issuer's preceding quarter.
Instructions
1. For purposes of this Schedule, ``foreign private issuer'' shall
be construed in accordance with Rule 405 under the Securities Act.
2. For purposes of this Schedule, the term ``U.S. holder'' shall
mean any person whose address appears on the records of the issuer, any
voting trustee, any depositary, any share transfer agent or any person
acting in a similar capacity on behalf of the issuer as being located in
the United States.
3. If this Schedule is filed during the pendency of one or more
ongoing cash tender or exchange offers for securities of the class
subject to this offer that was commenced or was eligible to be commenced
on Schedule 14D-1F and/or Form F-8 or Form F-80, the date for
calculation of U.S. ownership for purposes of this Schedule shall be the
same as that date used by the initial bidder or issuer.
4. For purposes of this Schedule, the class of subject securities
shall not include any securities that may be converted into or are
exchangeable for the subject securities.
B. Any issuer using this Schedule must extend the cash tender or
exchange offer to U.S. holders of the class of securities subject to the
offer upon terms and conditions not less favorable than those extended
to any other holder of the same class of such securities, and must
comply with the requirements of any Canadian federal, provincial and/or
territorial law, regulation or policy relating to the terms and
conditions of the offer.
C. This Schedule shall not be used if the issuer is an investment
company registered or required to be registered under the Investment
Company Act of 1940.
II. Filing Instructions and Fees
A.(1) The issuer must file this Schedule and any amendment to the
Schedule (see Part I, Item 1.(b)), including all exhibits and other
documents filed as part of the Schedule or amendment, in electronic
format via the Commission's Electronic Data Gathering, Analysis, and
Retrieval (EDGAR) system in accordance with the EDGAR rules set forth in
Regulation S-T (17 CFR Part 232). For assistance with technical
questions about EDGAR or to request an access code, call the EDGAR Filer
Support Office at (202) 942-8900. For assistance with the EDGAR rules,
call the Office of EDGAR and Information Analysis at (202) 942-2940.
(2) If filing the Schedule in paper under a hardship exemption in 17
CFR 232.201 or 232.202 of Regulation S-T, or as otherwise permitted, the
issuer must file with the Commission at its principal office five copies
of the complete Schedule and any amendment, including exhibits and all
other documents filed as a part of the Schedule or amendment. The issuer
must bind, staple or otherwise compile each copy in one or more parts
without stiff covers. The issuer must further bind the Schedule or
amendment on the side or stitching margin in a manner that leaves the
reading matter legible. The issuer must provide three additional copies
of the Schedule or amendment without exhibits to the Commission.
B. An electronic filer must provide the signatures required for the
Schedule or amendment in accordance with 17 CFR 232.302 of Regulation S-
T. An issuer filing in paper must have the original and at least one
copy of the Schedule and any amendment signed in accordance with
Exchange Act Rule 12b-11(d) (17 CFR 12b-11(d)) by the persons whose
signatures are required for this Schedule or amendment. The issuer must
also conform the unsigned copies.
C. At the time of filing this Schedule with the Commission, the
issuer shall pay to the Commission in accordance with Rule 0-11 of the
Exchange Act, a fee in U.S. dollars in the amount prescribed by section
13(e)(3) of the Exchange Act. See also Rule 0-9 of the Exchange Act.
(1) The value of the securities to be acquired solely for cash shall
be the amount of cash to be paid for them, calculated into U.S. dollars.
(2) The value of the securities to be acquired with securities or
other non-cash consideration, whether or not in combination with a cash
payment for the same securities, shall be based on the market value of
the securities to be acquired by the issuer as established in accordance
with paragraph (3) of this section.
(3) When the fee is based upon the market value of the securities,
such market value shall be established by either the average of the high
and low prices reported on the consolidated reporting system (for
exchange-traded securities and last sale reported for over-the-counter
securities) or the average of the bid and asked price (for other over-
the-counter securities) as of a specified date within 5 business days
prior to the date of
[[Page 156]]
filing the Schedule. If there is no market for the securities to be
acquired by the issuer, the value shall be based upon the book value of
such securities computed as of the latest practicable date prior to the
date of filing of the Schedule, unless the issuer of the securities is
in bankruptcy or receivership or has an accumulated capital deficit, in
which case one-third of the principal amount, par value or stated value
of such securities shall be used.
D. If at any time after the initial payment of the fee the aggregate
consideration offered is increased, an additional filing fee based upon
such increase shall be paid with the required amended filing.
E. The issuer must file the Schedule or amendment in electronic
format in the English language in accordance with 17 CFR 232.306 of
Regulation S-T. The issuer may file part of the Schedule or amendment,
or exhibit or other attachment to the Schedule or amendment, in both
French and English if the issuer included the French text to comply with
the requirements of the Canadian securities administrator or other
Canadian authority and, for an electronic filing, if the filing is an
HTML document, as defined in 17 CFR 232.11 of Regulation S-T. For both
an electronic filing and a paper filing, the issuer may provide an
English translation or English summary of a foreign language document as
an exhibit or other attachment to the Schedule or amendment as permitted
by the rules of the applicable Canadian securities administrator.
F. A paper filer must number sequentially the signed original of the
Schedule or amendment (in addition to any internal numbering that
otherwise may be present) by handwritten, typed, printed or other
legible form of notation from the first page through the last page of
the Schedule or amendment, including any exhibits or attachments. A
paper filer must disclose the total number of pages on the first page of
the sequentially numbered Schedule or amendment.
III. Compliance with the Exchange Act
A. Pursuant to Rule 13e-4(g) under the Exchange Act, the issuer
shall be deemed to comply with the requirements of section 13(e)(1) of
the Exchange Act and Rule 13e-4 and Schedule 13E-4 thereunder in
connection with a cash tender or exchange offer for securities that may
be made pursuant to this Schedule, provided that, if an exemption has
been granted from the requirements of Canadian federal, provincial and/
or territorial laws, regulations or policies, and the tender offer does
not comply with requirements that otherwise would be prescribed by Rule
13e-4, the issuer (absent an order from the Commission) shall comply
with the provisions of section 13(e)(1) and Rule 13e-4 and Schedule 13E-
4 thereunder.
B. Any cash tender or exchange offer made pursuant to this Schedule
is not exempt from the antifraud provisions of section 10(b) of the
Exchange Act and Rule 10b-5 thereunder, section 13(e)(1) of the Exchange
Act and Rule 13e-4(b)(1) thereunder, and section 14(e) of the Exchange
Act and Rule 14e-3 thereunder, and this Schedule shall be deemed
``filed'' for purposes of section 18 of the Exchange Act.
C. The issuer's attention is directed to Regulation M (Sec. Sec.
242.100 through 242.105 of this chapter), in the case of an issuer
exchange offer, and to Rule 10b-13 under the Exchange Act (Sec.
240.10b-13), in the case of an issuer cash tender offer or issuer
exchange offer. [See Exchange Act Release No. 29355 (June 21, 1991)
containing an exemption from Rule 10b-13.]
Part I--Information Required To Be Sent to Shareholders
Item 1. Home Jurisdiction Documents
(a) This Schedule shall be accompanied by the entire disclosure
document or documents required to be delivered to holders of securities
to be acquired by the issuer in the proposed transaction pursuant to the
laws, regulations or policies of the Canadian jurisdiction in which the
issuer is incorporated or organized, and any other Canadian federal,
provincial and/or territorial law, regulation or policy relating to the
terms and conditions of the offer. The Schedule need not include any
documents incorporated by reference into such disclosure document(s) and
not distributed to offerees pursuant to any such law, regulation or
policy.
(b) Any amendment made by the issuer to a home jurisdiction document
or documents shall be filed with the Commission under cover of this
Schedule, which must indicate on the cover page the number of the
amendment.
(c) In an exchange offer where securities of the issuer have been or
are to be offered or cancelled in the transaction, such securities shall
be registered on forms promulgated by the Commission under the
Securities Act of 1933 including, where available, the Commission's Form
F-8 or F-80 providing for inclusion in that registration statement of
the home jurisdiction prospectus.
Item 2. Informational Legends
The following legends, to the extent applicable, shall appear on the
outside front cover page of the home jurisdiction document(s) in bold-
face roman type at least as high as ten-point modern type and at least
two-points leaded:
``This tender offer is made by a foreign issuer for its own
securities, and while the offer is subject to disclosure requirements of
the country in which the issuer is incorporated or organized, investors
should be
[[Page 157]]
aware that these requirements are different from those of the United
States. Financial statements included herein, if any, have been prepared
in accordance with foreign generally accepted accounting principles and
thus may not be comparable to financial statements of United States
companies.
``The enforcement by investors of civil liabilities under the
federal securities laws may be affected adversely by the fact that the
issuer is located in a foreign country, and that some or all of its
officers and directors are residents of a foreign country.
``Investors should be aware that the issuer or its affiliates,
directly or indirectly, may bid for or make purchases of the securities
of the issuer subject to the offer, or of its related securities, during
the period of the issuer tender offer, as permitted by applicable
Canadian laws or provincial laws or regulations.''
Note to Item 2. If the home jurisdiction document(s) are delivered
through an electronic medium, the issuer may satisfy the legibility
requirements for the required legends relating to type size and fonts by
presenting the legend in any manner reasonably calculated to draw
security holder attention to it.
Part II--Information Not Required To Be Sent to Shareholders
The exhibits specified below shall be filed as part of the Schedule,
but are not required to be sent to shareholders unless so required
pursuant to the laws, regulations or policies of Canada and/or any of
its provinces or territories. Exhibits shall be lettered or numbered
appropriately for convenient reference.
(1) File any reports or information that, in accordance with the
requirements of the home jurisdiction(s), must be made publicly
available by the issuer in connection with the transaction, but need not
be disseminated to shareholders.
(2) File copies of any documents incorporated by reference into the
home jurisdiction document(s) .
(3) If any name is signed to the Schedule pursuant to power of
attorney, manually signed copies of any such power of attorney shall be
filed. If the name of any officer signing on behalf of the issuer is
signed pursuant to a power of attorney, certified copies of a resolution
of the issuer's board of directors authorizing such signature also shall
be filed.
Part III--Undertakings and Consent to Service of Process
1. Undertakings
The Schedule shall set forth the following undertakings of the
issuer:
(a) The issuer undertakes to make available, in person or by
telephone, representatives to respond to inquiries made by the
Commission staff, and to furnish promptly, when requested to do so by
the Commission staff, information relating to this Schedule or to
transactions in said securities.
(b) The issuer also undertakes to disclose in the United States, on
the same basis as it is required to make such disclosure pursuant to
applicable Canadian federal and/or provincial or territorial laws,
regulations or policies, or otherwise discloses, information regarding
purchases of the issuer's securities in connection with the cash tender
or exchange offer covered by this Schedule. Such information shall be
set forth in amendments to this Schedule.
2. Consent to Service of Process
(a) At the time of filing this Schedule, the issuer shall file with
the Commission a written irrevocable consent and power of attorney on
Form F-X.
(b) Any change to the name or address of a registrant's agent for
service shall be communicated promptly to the Commission by amendment to
Form F-X referencing the file number of the registrant.
Part IV--Signatures
A. The Schedule shall be signed by each person on whose behalf the
Schedule is filed or its authorized representative. If the Schedule is
signed on behalf of a person by his authorized representative (other
than an executive officer or general partner of the company), evidence
of the representative's authority shall be filed with the Schedule.
B. The name of each person who signs the Schedule shall be typed or
printed beneath his signature.
C. By signing this Schedule, the person(s) filing the Schedule
consents without power of revocation that any administrative subpoena
may be served, or any administrative proceeding, civil suit or civil
action where the cause of action arises out of or relates to or concerns
any offering made or purported to be made in connection with the filing
on Schedule 13E-4F or any purchases or sales of any security in
connection therewith, may be commenced against it in any administrative
tribunal or in any appropriate court in any place subject to the
jurisdiction of any state or of the United States by service of said
subpoena or process upon the registrant's designated agent.
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete and correct.
________________________________________________________________________
(Signature)
________________________________________________________________________
(Name and Title)
________________________________________________________________________
[[Page 158]]
(Date)
[56 FR 30069, July 1, 1991, as amended at 61 FR 24656, May 15, 1996; 62
FR 544, Jan. 3, 1997; 67 FR 36705, May 24, 2002]
Sec. 240.13f-1 Reporting by institutional investment managers of
information with respect to accounts over which they exercise
investment discretion.
(a)(1) Every institutional investment manager which exercises
investment discretion with respect to accounts holding section 13(f)
securities, as defined in paragraph (c) of this section, having an
aggregate fair market value on the last trading day of any month of any
calendar year of at least $100,000,000 shall file a report on Form 13F
(Sec. 249.325 of this chapter) with the Commission within 45 days after
the last day of such calendar year and within 45 days after the last day
of each of the first three calendar quarters of the subsequent calendar
year.
(2) An amendment to a Form 13F (Sec. 249.325 of this chapter)
report, other than one reporting only holdings that were not previously
reported in a public filing for the same period, must set forth the
complete text of the Form 13F. Amendments must be numbered sequentially.
(b) For the purposes of this rule, ``investment descretion'' has the
meaning set forth in section 3(a)(35) of the Act (15 U.S.C. 78c(a)(35)).
An institutional investment manager shall also be deemed to exercise
``investment discretion'' with respect to all accounts over which any
person under its control exercises investment discretion.
(c) For purposes of this rule ``section 13(f) securities'' shall
mean equity securities of a class described in section 13(d)(1) of the
Act that are admitted to trading on a national securities exchange or
quoted on the automated quotation system of a registered securities
association. In determining what classes of securities are section 13(f)
securities, an institutional investment manager may rely on the most
recent list of such securities published by the Commission pursuant to
section 13(f)(3) of the Act (15 U.S.C. 78m(f)(3)). Only securities of a
class on such list shall be counted in determining whether an
institutional investment manager must file a report under this rule
(Sec. 240.13f-1(a)) and only those securities shall be reported in such
report. Where a person controls the issuer of a class of equity
securities which are ``section 13(f) securities'' as defined in this
rule, those securities shall not be deemed to be ``section 13(f)
securities'' with respect to the controlling person, provided that such
person does not otherwise exercise investment descretion with respect to
accounts with fair market value of at least $100,000,000 within the
meaning of paragraph (a) of this section.
(Secs. 3(b), 13(f) and 23 of the Exchange Act (15 U.S.C. 78c(b), 78m(f)
and 78w))
[43 FR 26705, June 22, 1978, as amended at 44 FR 3034, Jan. 15, 1979; 64
FR 2849, Jan. 19, 1999]
Sec. 240.13k-1 Foreign bank exemption from the insider lending
prohibition under section 13(k).
(a) For the purpose of this section:
(1) Foreign bank means an institution:
(i) The home jurisdiction of which is other than the United States;
(ii) That is regulated as a bank in its home jurisdiction; and
(iii) That engages directly in the business of banking.
(2) Home jurisdiction means the country, political subdivision or
other place in which a foreign bank is incorporated or organized.
(3) Engages directly in the business of banking means that an
institution engages directly in banking activities that are usual for
the business of banking in its home jurisdiction.
(4) Affiliate, parent and subsidiary have the same meaning as under
17 CFR 240.12b-2.
(b) An issuer that is a foreign bank or the parent or other
affiliate of a foreign bank is exempt from the prohibition of extending,
maintaining, arranging for, or renewing credit in the form of a personal
loan to or for any of its directors or executive officers under section
13(k) of the Act (15 U.S.C. 78m(k)) with respect to any such loan made
by the foreign bank as long as:
(1) Either:
(i) The laws or regulations of the foreign bank's home jurisdiction
require the bank to insure its deposits or be subject to a deposit
guarantee or protection scheme; or
[[Page 159]]
(ii) The Board of Governors of the Federal Reserve System has
determined that the foreign bank or another bank organized in the
foreign bank's home jurisdiction is subject to comprehensive supervision
or regulation on a consolidated basis by the bank supervisor in its home
jurisdiction under 12 CFR 211.24(c); and
(2) The loan by the foreign bank to any of its directors or
executive officers or those of its parent or other affiliate:
(i) Is on substantially the same terms as those prevailing at the
time for comparable transactions by the foreign bank with other persons
who are not executive officers, directors or employees of the foreign
bank, its parent or other affiliate; or
(ii) Is pursuant to a benefit or compensation program that is widely
available to the employees of the foreign bank, its parent or other
affiliate and does not give preference to any of the executive officers
or directors of the foreign bank, its parent or other affiliate over any
other employees of the foreign bank, its parent or other affiliate; or
(iii) Has received express approval by the bank supervisor in the
foreign bank's home jurisdiction.
Notes to paragraph (b): 1. The exemption provided in paragraph (b)
of this section applies to a loan by the subsidiary of a foreign bank to
a director or executive officer of the foreign bank, its parent or other
affiliate as long as the subsidiary is under the supervision or
regulation of the bank supervisor in the foreign bank's home
jurisdiction, the subsidiary's loan meets the requirements of paragraph
(b)(2) of this section, and the foreign bank meets the requirements of
paragraph (b)(1) of this section.
2. For the purpose of paragraph (b)(1)(ii) of this section, a
foreign bank may rely on a determination by the Board of Governors of
the Federal Reserve System that another bank in the foreign bank's home
jurisdiction is subject to comprehensive supervision or regulation on a
consolidated basis by the bank supervisor under 12 CFR 211.24(c) as long
as the foreign bank is under substantially the same banking supervision
or regulation as the other bank in their home jurisdiction.
(c) As used in paragraph (1) of section 13(k) of the Act (15 U.S.C.
78m(k)(1)), issuer does not include a foreign government, as defined
under 17 CFR 230.405, that files a registration statement under the
Securities Act of 1933 (15 U.S.C. 77a et seq.) on Schedule B.
[69 FR 24024, Apr. 30, 2004]
Regulation 14A: Solicitation of Proxies
ATTENTION ELECTRONIC FILERS
THIS REGULATION SHOULD BE READ IN CONJUNCTION WITH REGULATION S-T (PART
232 OF THIS CHAPTER), WHICH GOVERNS THE PREPARATION AND SUBMISSION OF
DOCUMENTS IN ELECTRONIC FORMAT. MANY PROVISIONS RELATING TO THE
PREPARATION AND SUBMISSION OF DOCUMENTS IN PAPER FORMAT CONTAINED IN
THIS REGULATION ARE SUPERSEDED BY THE PROVISIONS OF REGULATION S-T FOR
DOCUMENTS REQUIRED TO BE FILED IN ELECTRONIC FORMAT.
Sec. 240.14a-1 Definitions.
Unless the context otherwise requires, all terms used in this
regulation have the same meanings as in the Act or elsewhere in the
general rules and regulations thereunder. In addition, the following
definitions apply unless the context otherwise requires:
(a) Associate. The term ``associate,'' used to indicate a
relationship with any person, means:
(1) Any corporation or organization (other than the registrant or a
majority owned subsidiary of the registrant) of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner
of 10 percent or more of any class of equity securities;
(2) Any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a
similar fiduciary capacity; and
(3) Any relative or spouse of such person, or any relative of such
spouse, who has the same home as such person or who is a director or
officer of the registrant or any of its parents or subsidiaries.
(b) Employee benefit plan. For purposes of Sec. Sec. 240.14a-13,
240.14b-1 and 240.14b-2, the term ``employee benefit plan'' means any
purchase, savings, option, bonus, appreciation, profit sharing, thrift,
incentive, pension or similar plan primarily for employees, directors,
trustees or officers.
[[Page 160]]
(c) Entity that exercises fiduciary powers. The term ``entity that
exercises fiduciary powers'' means any entity that holds securities in
nominee name or otherwise on behalf of a beneficial owner but does not
include a clearing agency registered pursuant to section 17A of the Act
or a broker or a dealer.
(d) Exempt employee benefit plan securities. For purposes of
Sec. Sec. 240.14a-13, 240.14b-1 and 240.14b-2, the term ``exempt
employee benefit plan securities'' means:
(1) Securities of the registrant held by an employee benefit plan,
as defined in paragraph (b) of this section, where such plan is
established by the registrant; or
(2) If notice regarding the current solicitation has been given
pursuant to Sec. 240.14a-13(a)(1)(ii)(C) or if notice regarding the
current request for a list of names, addresses and securities positions
of beneficial owners has been given pursuant to Sec. 240.14a-13(b)(3),
securities of the registrant held by an employee benefit plan, as
defined in paragraph (b) of this section, where such plan is established
by an affiliate of the registrant.
(e) Last fiscal year. The term ``last fiscal year'' of the
registrant means the last fiscal year of the registrant ending prior to
the date of the meeting for which proxies are to be solicited or if the
solicitation involves written authorizations or consents in lieu of a
meeting, the earliest date they may be used to effect corporate action.
(f) Proxy. The term ``proxy'' includes every proxy, consent or
authorization within the meaning of section 14(a) of the Act. The
consent or authorization may take the form of failure to object or to
dissent.
(g) Proxy statement. The term ``proxy statement'' means the
statement required by Sec. 240.14a-3(a) whether or not contained in a
single document.
(h) Record date. The term ``record date'' means the date as of which
the record holders of securities entitled to vote at a meeting or by
written consent or authorization shall be determined.
(i) Record holder. For purposes of Sec. Sec. 240.14a-13, 240.14b-1
and 240.14b-2, the term ``record holder'' means any broker, dealer,
voting trustee, bank, association or other entity that exercises
fiduciary powers which holds securities of record in nominee name or
otherwise or as a participant in a clearing agency registered pursuant
to section 17A of the Act.
(j) Registrant. The term ``registrant'' means the issuer of the
securities in respect of which proxies are to be solicited.
(k) Respondent bank. For purposes of Sec. Sec. 240.14a-13, 240.14b-
1 and 240.14b-2, the term ``respondent bank'' means any bank,
association or other entity that exercises fiduciary powers which holds
securities on behalf of beneficial owners and deposits such securities
for safekeeping with another bank, association or other entity that
exercises fiduciary powers.
(l) Solicitation. (1) The terms ``solicit'' and ``solicitation''
include:
(i) Any request for a proxy whether or not accompanied by or
included in a form of proxy:
(ii) Any request to execute or not to execute, or to revoke, a
proxy; or
(iii) The furnishing of a form of proxy or other communication to
security holders under circumstances reasonably calculated to result in
the procurement, withholding or revocation of a proxy.
(2) The terms do not apply, however, to:
(i) The furnishing of a form of proxy to a security holder upon the
unsolicited request of such security holder;
(ii) The performance by the registrant of acts required by Sec.
240.14a-7;
(iii) The performance by any person of ministerial acts on behalf of
a person soliciting a proxy; or
(iv) A communication by a security holder who does not otherwise
engage in a proxy solicitation (other than a solicitation exempt under
Sec. 240.14a-2) stating how the security holder intends to vote and the
reasons therefor, provided that the communication:
(A) Is made by means of speeches in public forums, press releases,
published or broadcast opinions, statements, or advertisements appearing
in a broadcast media, or newspaper, magazine or other bona fide
publication disseminated on a regular basis,
(B) Is directed to persons to whom the security holder owes a
fiduciary
[[Page 161]]
duty in connection with the voting of securities of a registrant held by
the security holder, or
(C) Is made in response to unsolicited requests for additional
information with respect to a prior communication by the security holder
made pursuant to this paragraph (l)(2)(iv).
[51 FR 44275, Dec. 9, 1986, as amended at 52 FR 23648, June 24, 1987; 53
FR 16405, May, 9, 1988; 57 FR 48290, Oct. 22, 1992]
Sec. 240.14a-2 Solicitations to which Sec. 240.14a-3 to
Sec. 240.14a-15 apply.
Sections 240.14a-3 to 240.14a-15, except as specified, apply to
every solicitation of a proxy with respect to securities registered
pursuant to section 12 of the Act (15 U.S.C. 78l), whether or not
trading in such securities has been suspended. To the extent specified
below, certain of these sections also apply to roll-up transactions that
do not involve an entity with securities registered pursuant to section
12 of the Act.
(a) Sections 240.14a-3 to 240.14a-15 do not apply to the following:
(1) Any solicitation by a person in respect to securities carried in
his name or in the name of his nominee (otherwise than as voting
trustee) or held in his custody, if such person--
(i) Receives no commission or remuneration for such solicitation,
directly or indirectly, other than reimbursement of reasonable expenses,
(ii) Furnishes promptly to the person solicited (or such person's
household in accordance with Sec. 240.14a-3(e)(1)) a copy of all
soliciting material with respect to the same subject matter or meeting
received from all persons who shall furnish copies thereof for such
purpose and who shall, if requested, defray the reasonable expenses to
be incurred in forwarding such material, and
(iii) In addition, does no more than impartially instruct the person
solicited to forward a proxy to the person, if any, to whom the person
solicited desires to give a proxy, or impartially request from the
person solicited instructions as to the authority to be conferred by the
proxy and state that a proxy will be given if no instructions are
received by a certain date.
(2) Any solicitation by a person in respect of securities of which
he is the beneficial owner;
(3) Any solicitation involved in the offer and sale of securities
registered under the Securities Act of 1933: Provided, That this
paragraph shall not apply to securities to be issued in any transaction
of the character specified in paragraph (a) of Rule 145 under that Act;
(4) Any solicitation with respect to a plan of reorganization under
Chapter 11 of the Bankruptcy Reform Act of 1978, as amended, if made
after the entry of an order approving the written disclosure statement
concerning a plan of reorganization pursuant to section 1125 of said Act
and after, or concurrently with, the transmittal of such disclosure
statement as required by section 1125 of said Act;
(5) Any solicitation which is subject to Rule 62 under the Public
Utility Holding Company Act of 1935; and
(6) Any solicitation through the medium of a newspaper advertisement
which informs security holders of a source from which they may obtain
copies of a proxy statement, form of proxy and any other soliciting
material and does no more than:
(i) Name the registrant,
(ii) State the reason for the advertisement, and
(iii) Identify the proposal or proposals to be acted upon by
security holders.
(b) Sections 240.14a-3 to 240.14a-6 (other than 14a-6(g)), 240.14a-
8, and 240.14a-10 to 240.14a-15 do not apply to the following:
(1) Any solicitation by or on behalf of any person who does not, at
any time during such solicitation, seek directly or indirectly, either
on its own or another's behalf, the power to act as proxy for a security
holder and does not furnish or otherwise request, or act on behalf of a
person who furnishes or requests, a form of revocation, abstention,
consent or authorization. Provided, however, That the exemption set
forth in this paragraph shall not apply to:
(i) The registrant or an affiliate or associate of the registrant
(other than an officer or director or any person serving in a similar
capacity);
[[Page 162]]
(ii) An officer or director of the registrant or any person serving
in a similar capacity engaging in a solicitation financed directly or
indirectly by the registrant;
(iii) An officer, director, affiliate or associate of a person that
is ineligible to rely on the exemption set forth in this paragraph
(other than persons specified in paragraph (b)(1)(i) of this section),
or any person serving in a similar capacity;
(iv) Any nominee for whose election as a director proxies are
solicited;
(v) Any person soliciting in opposition to a merger,
recapitalization, reorganization, sale of assets or other extraordinary
transaction recommended or approved by the board of directors of the
registrant who is proposing or intends to propose an alternative
transaction to which such person or one of its affiliates is a party;
(vi) Any person who is required to report beneficial ownership of
the registrant's equity securities on a Schedule 13D (Sec. 240.13d-
101), unless such person has filed a Schedule 13D and has not disclosed
pursuant to Item 4 thereto an intent, or reserved the right, to engage
in a control transaction, or any contested solicitation for the election
of directors;
(vii) Any person who receives compensation from an ineligible person
directly related to the solicitation of proxies, other than pursuant to
Sec. 240.14a-13;
(viii) Where the registrant is an investment company registered
under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), an
``interested person'' of that investment company, as that term is
defined in section 2(a)(19) of the Investment Company Act (15 U.S.C.
80a-2);
(ix) Any person who, because of a substantial interest in the
subject matter of the solicitation, is likely to receive a benefit from
a successful solicitation that would not be shared pro rata by all other
holders of the same class of securities, other than a benefit arising
from the person's employment with the registrant; and
(x) Any person acting on behalf of any of the foregoing.
(2) Any solicitation made otherwise than on behalf of the registrant
where the total number of persons solicited is not more than ten;
(3) The furnishing of proxy voting advice by any person (the
``advisor'') to any other person with whom the advisor has a business
relationship, if:
(i) The advisor renders financial advice in the ordinary course of
his business;
(ii) The advisor discloses to the recipient of the advice any
significant relationship with the registrant or any of its affiliates,
or a security holder proponent of the matter on which advice is given,
as well as any material interests of the advisor in such matter.
(iii) The advisor receives no special commission or remuneration for
furnishing the proxy voting advice from any person other than a
recipient of the advice and other persons who receive similar advice
under this subsection; and
(iv) The proxy voting advice is not furnished on behalf of any
person soliciting proxies or on behalf of a participant in an election
subject to the provisions of Rule 14a-11; and
(4) Any solicitation in connection with a roll-up transaction as
defined in Item 901(c) of Regulation S-K (Sec. 229.901 of this chapter)
in which the holder of a security that is the subject of a proposed
roll-up transaction engages in preliminary communications with other
holders of securities that are the subject of the same limited
partnership roll-up transaction for the purpose of determining whether
to solicit proxies, consents, or authorizations in opposition to the
proposed limited partnership roll-up transaction; provided, however,
that:
(i) This exemption shall not apply to a security holder who is an
affiliate of the registrant or general partner or sponsor; and
(ii) This exemption shall not apply to a holder of five percent (5%)
or more of the outstanding securities of a class that is the subject of
the proposed roll-up transaction who engages in the business of buying
and selling limited partnership interests in the secondary market unless
that holder discloses to the persons to whom the communications are made
such ownership interest and any relations of the holder to the parties
of the transaction or to the
[[Page 163]]
transaction itself, as required by Sec. 240.14a-6(n)(1) and specified
in the Notice of Exempt Preliminary Roll-up Communication (Sec.
240.14a-104). If the communication is oral, this disclosure may be
provided to the security holder orally. Whether the communication is
written or oral, the notice required by Sec. 240.14a-6(n) and Sec.
240.14a-104 shall be furnished to the Commission.
(5) Publication or distribution by a broker or a dealer of a
research report in accordance with Rule 138 (Sec. 230.138 of this
chapter) or Rule 139 (Sec. 230.139 of this chapter) during a
transaction in which the broker or dealer or its affiliate participates
or acts in a an advisory role.
[44 FR 68769, Nov. 29, 1979, as amended at 51 FR 42059, Nov. 20, 1986;
52 FR 21936, June 10, 1987; 57 FR 48290, Oct. 22, 1992; 59 FR 63684,
Dec. 8, 1994; 65 FR 65749, Nov. 2, 2000; 70 FR 44829, Aug. 3, 2005]
Sec. 240.14a-3 Information to be furnished to security holders.
(a) No solicitation subject to this regulation shall be made unless
each person solicited is concurrently furnished or has previously been
furnished with a publicly-filed preliminary or definitive written proxy
statement containing the information specified in Schedule 14A (Sec.
240.14a-101) or with a preliminary or definitive written proxy statement
included in a registration statement filed under the Securities Act of
1933 on Form S-4 or F-4 (Sec. 239.25 or Sec. 239.34 of this chapter)
or Form N-14 (Sec. 239.23) and containing the information specified in
such Form.
(b) If the solicitation is made on behalf of the registrant, other
than an investment company registered under the Investment Company Act
of 1940, and relates to an annual (or special meeting in lieu of the
annual) meeting of security holders, or written consent in lieu of such
meeting, at which directors are to be elected, each proxy statement
furnished pursuant to paragraph (a) of this section shall be accompanied
or preceded by an annual report to security holders as follows:
Note to Small Business Issuers--A ``small business issuer,'' defined
under Rule 12b-2 of the Exchange Act (Sec. 240.12b-2), shall refer to
the disclosure items in Regulation S-B (Sec. 228.10--702 of this
chapter) rather than Regulation S-K (Sec. 229.10--702 of this chapter).
If there is no comparable disclosure item in Regulation S-B, a small
business issuer need not provide the information requested. A small
business issuer shall provide the information in Item 310(a) of
Regulation S-B in lieu of the financial information required by Rule
14a-3(b)(1) (Sec. 240.14a-3(b)(1)). Small business issuers using the
transitional small business issuers disclosure format in the filing of
their most recent annual report on Form 10-KSB (Sec. 249.310b of this
chapter) need not provide the information specified below. Rather, those
small business issuers shall provide only the financial statements
required to be filed in their most recent Form 10-KSB. The inclusion of
additional information, including information required of non-
transitional small business issuers, in the annual report to security
holders will not cause the issuer to be ineligible for the transitional
disclosure forms.
(1) The report shall include, for the registrant and its
subsidiaries consolidated, audited balance sheets as of the end of each
of the two most recent fiscal years and audited statements of income and
cash flows for each of the three most recent fiscal years prepared in
accordance with Regulation S-X (part 210 of this chapter), except that
the provisions of Article 3 (other than Sec. Sec. 210.3-03(e), 210.3-04
and 210.3-20) and Article 11 shall not apply. Any financial statement
schedules or exhibits or separate financial statements which may
otherwise be required in filings with the Commission may be omitted. If
the financial statements of the registrant and its subsidiaries
consolidated in the annual report filed or to be filed with the
Commission are not required to be audited, the financial statements
required by this paragraph may be unaudited.
Note 1--If the financial statements for a period prior to the most
recently completed fiscal year have been examined by a predecessor
accountant, the separate report of the predecessor accountant may be
omitted in the report to security holders provided the registrant has
obtained from the predecessor accountant a reissued report covering the
prior period presented and the successor accountant clearly indicates in
the scope paragraph of his report (a) that the financial statements of
the prior period were examined by other accountants, (b) the date of
their report, (c) the type of opinion expressed by the predecessor
accountant and (d) the substantive reasons therefor, if it was other
[[Page 164]]
than unqualified. It should be noted, however, that the separate report
of any predecessor accountant is required in filings with the
Commission. If, for instance, the financial statements in the annual
report to security holders are incorporated by reference in a Form 10-K
and Form 10-KSB, the separate report of a predecessor accountant shall
be filed in Part II or in Part IV as a financial statement schedule.
Note 2--For purposes of complying with Sec. 240.14a-3, if the
registrant has changed its fiscal closing date, financial statements
covering two years and one period of 9 to 12 months shall be deemed to
satisfy the requirements for statements of income and cash flows for the
three most recent fiscal years.
(2)(i) Financial statements and notes thereto shall be presented in
roman type at least as large and as legible as 10-point modern type. If
necessary for convenient presentation, the financial statements may be
in roman type as large and as legible as 8-point modern type. All type
shall be leaded at least 2 points.
(ii) Where the annual report to security holders is delivered
through an electronic medium, issuers may satisfy legibility
requirements applicable to printed documents, such as type size and
font, by presenting all required information in a format readily
communicated to investors.
(3) The report shall contain the supplementary financial information
required by item 302 of Regulation S-K (Sec. 229.302 of this chapter).
(4) The report shall contain information concerning changes in and
disagreements with accountants on accounting and financial disclosure
required by Item 304 of Regulation S-K (Sec. 229.304 of this chapter).
(5)(i) The report shall contain the selected financial data required
by Item 301 of Regulation S-K (Sec. 229.301 of this chapter).
(ii) The report shall contain management's discussion and analysis
of financial condition and results of operations required by Item 303 of
Regulation S-K (Sec. 229.303 of this chapter) or, if applicable, a plan
of operation required by Item 303(a) of Regulation S-B (Sec. 228.303(a)
of this chapter).
(iii) The report shall contain the quantitative and qualitative
disclosures about market risk required by Item 305 of Regulation S-K
(Sec. 229.305 of this chapter).
(6) The report shall contain a brief description of the business
done by the registrant and its subsidiaries during the most recent
fiscal year which will, in the opinion of management, indicate the
general nature and scope of the business of the registrant and its
subsidiaries.
(7) The report shall contain information relating to the
registrant's industry segments, classes of similar products or services,
foreign and domestic operations and exports sales required by paragraphs
(b), (c)(1)(i) and (d) of Item 101 of Regulation S-K (Sec. 229.101 of
this chapter).
(8) The report shall identify each of the registrant's directors and
executive officers, and shall indicate the principal occupation or
employment of each such person and the name and principal business of
any organization by which such person is employed.
(9) The report shall contain the market price of and dividends on
the registrant's common equity and related security holder matters
required by Item 201(a), (b) and (c) of Regulation S-K (Sec.
229.201(a), (b) and (c) of this chapter).
(10) The registrant's proxy statement, or the report, shall contain
an undertaking in bold face or otherwise reasonably prominent type to
provide without charge to each person solicited upon the written request
of any such person, a copy of the registrant's annual report on Form 10-
K and Form 10-KSB, including the financial statements and the financial
statement schedules, required to be filed with the Commission pursuant
to Rule 13a-1 under the Act for the registrant's most recent fiscal
year, and shall indicate the name and address (including title or
department) of the person to whom such a written request is to be
directed. In the discretion of management, a registrant need not
undertake to furnish without charge copies of all exhibits to its Form
10-K and Form 10-KSB provided the that copy of the annual report on Form
10-K and Form 10-KSB furnished without charge to requesting security
holders is accompanied by a list briefly describing all the exhibits not
contained therein and
[[Page 165]]
indicating that the registrant will furnish any exhibit upon the payment
of a specified reasonable fee which fee shall be limited to the
registrant's reasonable expenses in furnishing such exhibit. If the
registrant's annual report to security holders complies with all of the
disclosure requirements of Form 10-K and Form 10-KSB and is filed with
the Commission in satisfaction of its Form 10-K and Form 10-KSB filing
requirements, such registrant need not furnish a separate Form 10-K and
Form 10-KSB to security holders who receive a copy of such annual
report.
Note: Pursuant to the undertaking required by paragraph (b)(10) of
this section, a registrant shall furnish a copy of its annual report on
Form 10-K and Form 10-KSB (Sec. 249.310 of this chapter) to a
beneficial owner of its securities upon receipt of a written request
from such person. Each request must set forth a good faith
representation that, as of the record date for the solicitation
requiring the furnishing of the annual report to security holders
pursuant to paragraph (b) of this section, the person making the request
was a beneficial owner of securities entitled to vote.
(11) Subject to the foregoing requirements, the report may be in any
form deemed suitable by management and the information required by
paragraphs (b)(5) to (10) of this section may be presented in an
appendix or other separate section of the report, provided that the
attention of security holders is called to such presentation.
Note: Registrants are encouraged to utilize tables, schedules,
charts and graphic illustrations of present financial information in an
understandable manner. Any presentation of financial information must be
consistent with the data in the financial statements contained in the
report and, if appropriate, should refer to relevant portions of the
financial statements and notes thereto.
(12) [Reserved]
(13) Paragraph (b) of this section shall not apply, however, to
solicitations made on behalf of the registrant before the financial
statements are available if a solicitation is being made at the same
time in opposition to the registrant and if the registrant's proxy
statement includes an undertaking in bold face type to furnish such
annual report to all persons being solicited at least 20 calendar days
before the date of the meeting or, if the solicitation refers to a
written consent or authorization in lieu of a meeting, at least 20
calendar days prior to the earliest date on which it may be used to
effect corporate action.
(c) Seven copies of the report sent to security holders pursuant to
this rule shall be mailed to the Commission, solely for its information,
not later than the date on which such report is first sent or given to
security holders or the date on which preliminary copies, or definitive
copies, if preliminary filing was not required, of solicitation material
are filed with the Commission pursuant to Rule 14a-6, whichever date is
later. The report is not deemed to be ``soliciting material'' or to be
``filed'' with the Commission or subject to this regulation otherwise
than as provided in this Rule, or to the liabilities of section 18 of
the Act, except to the extent that the registrant specifically requests
that it be treated as a part of the proxy soliciting material or
incorporates it in the proxy statement or other filed report by
reference.
(d) An annual report to security holders prepared on an integrated
basis pursuant to General Instruction H to Form 10-K and Form 10-KSB
(Sec. 249.310) may also be submitted in satisfaction of this rule. When
filed as the annual report on Form 10-K and Form 10-KSB, responses to
the Items of that form are subject to section 18 of the Act
notwithstanding paragraph (c) of this section.
(e)(1)(i) A registrant will be considered to have delivered an
annual report or proxy statement to all security holders of record who
share an address if:
(A) The registrant delivers one annual report or proxy statement, as
applicable, to the shared address;
(B) The registrant addresses the annual report or proxy statement,
as applicable, to the security holders as a group (for example, ``ABC
Fund [or Corporation] Security Holders,'' ``Jane Doe and Household,''
``The Smith Family''), to each of the security holders individually (for
example, ``John Doe and Richard Jones'') or to the security holders in a
form to which each of the security holders has consented in writing;
Note to paragraph (e)(1)(i)(B): Unless the company addresses the
annual report or
[[Page 166]]
proxy statement to the security holders as a group or to each of the
security holders individually, it must obtain, from each security holder
to be included in the householded group, a separate affirmative written
consent to the specific form of address the company will use.
(C) The security holders consent, in accordance with paragraph
(e)(1)(ii) of this section, to delivery of one annual report or proxy
statement, as applicable;
(D) With respect to delivery of the proxy statement, the registrant
delivers, together with or subsequent to delivery of the proxy
statement, a separate proxy card for each security holder at the shared
address; and
(E) The registrant includes an undertaking in the proxy statement to
deliver promptly upon written or oral request a separate copy of the
annual report or proxy statement, as applicable, to a security holder at
a shared address to which a single copy of the document was delivered.
(ii) Consent. (A) Affirmative written consent. Each security holder
must affirmatively consent, in writing, to delivery of one annual report
or proxy statement, as applicable. A security holder's affirmative
written consent will only be considered valid if the security holder has
been informed of:
(1) The duration of the consent;
(2) The specific types of documents to which the consent will apply;
(3) The procedures the security holder must follow to revoke
consent; and
(4) The registrant's obligation to begin sending individual copies
to a security holder within thirty days after the security holder
revokes consent.
(B) Implied consent. The registrant need not obtain affirmative
written consent from a security holder for purposes of paragraph
(e)(1)(ii)(A) of this section if all of the following conditions are
met:
(1) The security holder has the same last name as the other security
holders at the shared address or the registrant reasonably believes that
the security holders are members of the same family;
(2) The registrant has sent the security holder a notice at least 60
days before the registrant begins to rely on this section concerning
delivery of annual reports and proxy statements to that security holder.
The notice must:
(i) Be a separate written document;
(ii) State that only one annual report or proxy statement, as
applicable, will be delivered to the shared address unless the
registrant receives contrary instructions;
(iii) Include a toll-free telephone number, or be accompanied by a
reply form that is pre-addressed with postage provided, that the
security holder can use to notify the registrant that the security
holder wishes to receive a separate annual report or proxy statement;
(iv) State the duration of the consent;
(v) Explain how a security holder can revoke consent;
(vi) State that the registrant will begin sending individual copies
to a security holder within thirty days after the security holder
revokes consent; and
(vii) Contain the following prominent statement, or similar clear
and understandable statement, in bold-face type: ``Important Notice
Regarding Delivery of Security Holder Documents.'' This statement also
must appear on the envelope in which the notice is delivered.
Alternatively, if the notice is delivered separately from other
communications to security holders, this statement may appear either on
the notice or on the envelope in which the notice is delivered.
Note to paragraph (e)(1)(ii)(B)(2): The notice should be written in
plain English. See Sec. 230.421(d)(2) of this chapter for a discussion
of plain English principles.
(3) The registrant has not received the reply form or other
notification indicating that the security holder wishes to continue to
receive an individual copy of the annual report or proxy statement, as
applicable, within 60 days after the registrant sent the notice; and
(4) The registrant delivers the document to a post office box or
residential street address.
Note to paragraph (e)(1)(ii)(B)(4): The registrant can assume that a
street address is residential unless the registrant has information that
indicates the street address is a business.
[[Page 167]]
(iii) Revocation of consent. If a security holder, orally or in
writing, revokes consent to delivery of one annual report or proxy
statement to a shared address, the registrant must begin sending
individual copies to that security holder within 30 days after the
registrant receives revocation of the security holder's consent.
(iv) Definition of address. Unless otherwise indicated, for purposes
of this section, address means a street address, a post office box
number, an electronic mail address, a facsimile telephone number or
other similar destination to which paper or electronic documents are
delivered, unless otherwise provided in this section. If the registrant
has reason to believe that the address is a street address of a multi-
unit building, the address must include the unit number.
Note to paragraph (e)(1): A person other than the registrant making
a proxy solicitation may deliver a single proxy statement to security
holders of record or beneficial owners who have separate accounts and
share an address if: (a) the registrant or intermediary has followed the
procedures in this section; and (b) the registrant or intermediary makes
available the shared address information to the person in accordance
with Sec. 240.14a-7(a)(2)(i) and (ii).
(2) Notwithstanding paragraphs (a) and (b) of this section, unless
state law requires otherwise, a registrant is not required to send an
annual report or proxy statement to a security holder if:
(i) An annual report and a proxy statement for two consecutive
annual meetings; or
(ii) All, and at least two, payments (if sent by first class mail)
of dividends or interest on securities, or dividend reinvestment
confirmations, during a twelve month period, have been mailed to such
security holder's address and have been returned as undeliverable. If
any such security holder delivers or causes to be delivered to the
registrant written notice setting forth his then current address for
security holder communications purposes, the registrant's obligation to
deliver an annual report or a proxy statement under this section is
reinstated.
(f) The provisions of paragraph (a) of this section shall not apply
to a communication made by means of speeches in public forums, press
releases, published or broadcast opinions, statements, or advertisements
appearing in a broadcast media, newspaper, magazine or other bona fide
publication disseminated on a regular basis, provided that:
(1) No form of proxy, consent or authorization or means to execute
the same is provided to a security holder in connection with the
communication; and
(2) At the time the communication is made, a definitive proxy
statement is on file with the Commission pursuant to Sec. 240.14a-6(b).
[39 FR 40768, Nov. 20, 1974]
Editorial Note: For Federal Register citations affecting Sec.
240.14a-3, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 240.14a-4 Requirements as to proxy.
(a) The form of proxy (1) shall indicate in bold-face type whether
or not the proxy is solicited on behalf of the registrant's board of
directors or, if provided other than by a majority of the board of
directors, shall indicate in bold-face type on whose behalf the
solicitation is made;
(2) Shall provide a specifically designated blank space for dating
the proxy card; and
(3) Shall identify clearly and impartially each separate matter
intended to be acted upon, whether or not related to or conditioned on
the approval of other matters, and whether proposed by the registrant or
by security holders. No reference need be made, however, to proposals as
to which discretionary authority is conferred pursuant to paragraph (c)
of this section.
Note to paragraph (a)(3) (Electronic filers): Electronic filers
shall satisfy the filing requirements of Rule 14a-6(a) or (b) (Sec.
240.14a-6(a) or (b)) with respect to the form of proxy by filing the
form of proxy as an appendix at the end of the proxy statement. Forms of
proxy shall not be filed as exhibits or separate documents within an
electronic submission.
(b)(1) Means shall be provided in the form of proxy whereby the
person solicited is afforded an opportunity to specify by boxes a choice
between approval or disapproval of, or abstention
[[Page 168]]
with respect to each separate matter referred to therein as intended to
be acted upon, other than elections to office. A proxy may confer
discretionary authority with respect to matters as to which a choice is
not specified by the security holder provided that the form of proxy
states in bold-face type how it is intended to vote the shares
represented by the proxy in each such case.
(2) A form of proxy which provides for the election of directors
shall set forth the names of persons nominated for election as
directors. Such form of proxy shall clearly provide any of the following
means for security holders to withhold authority to vote for each
nominee:
(i) A box opposite the name of each nominee which may be marked to
indicate that authority to vote for such nominee is withheld; or
(ii) An instruction in bold-face type which indicates that the
security holder may withhold authority to vote for any nominee by lining
through or otherwise striking out the name of any nominee; or
(iii) Designated blank spaces in which the security holder may enter
the names of nominees with respect to whom the security holder chooses
to withhold authority to vote; or
(iv) Any other similar means, provided that clear instructions are
furnished indicating how the security holder may withhold authority to
vote for any nominee.
Such form of proxy also may provide a means for the security holder to
grant authority to vote for the nominees set forth, as a group, provided
that there is a similar means for the security holder to withhold
authority to vote for such group of nominees. Any such form of proxy
which is executed by the security holder in such manner as not to
withhold authority to vote for the election of any nominee shall be
deemed to grant such authority, provided that the form of proxy so
states in bold-face type.
Instructions. 1. Paragraph (2) does not apply in the case of a
merger, consolidation or other plan if the election of directors is an
integral part of the plan.
2. If applicable state law gives legal effect to votes cast against
a nominee, then in lieu of, or in addition to, providing a means for
security holders to withhold authority to vote, the registrant should
provide a similar means for security holders to vote against each
nominee.
(c) A proxy may confer discretionary authority to vote on any of the
following matters:
(1) For an annual meeting of shareholders, if the registrant did not
have notice of the matter at least 45 days before the date on which the
registrant first mailed its proxy materials for the prior year's annual
meeting of shareholders (or date specified by an advance notice
provision), and a specific statement to that effect is made in the proxy
statement or form of proxy. If during the prior year the registrant did
not hold an annual meeting, or if the date of the meeting has changed
more than 30 days from the prior year, then notice must not have been
received a reasonable time before the registrant mails its proxy
materials for the current year.
(2) In the case in which the registrant has received timely notice
in connection with an annual meeting of shareholders (as determined
under paragraph (c)(1) of this section), if the registrant includes, in
the proxy statement, advice on the nature of the matter and how the
registrant intends to exercise its discretion to vote on each matter.
However, even if the registrant includes this information in its proxy
statement, it may not exercise discretionary voting authority on a
particular proposal if the proponent:
(i) Provides the registrant with a written statement, within the
time-frame determined under paragraph (c)(1) of this section, that the
proponent intends to deliver a proxy statement and form of proxy to
holders of at least the percentage of the company's voting shares
required under applicable law to carry the proposal;
(ii) Includes the same statement in its proxy materials filed under
Sec. 240.14a-6; and
(iii) Immediately after soliciting the percentage of shareholders
required to carry the proposal, provides the registrant with a statement
from any solicitor or other person with knowledge that the necessary
steps have been taken to deliver a proxy statement and
[[Page 169]]
form of proxy to holders of at least the percentage of the company's
voting shares required under applicable law to carry the proposal.
(3) For solicitations other than for annual meetings or for
solicitations by persons other than the registrant, matters which the
persons making the solicitation do not know, a reasonable time before
the solicitation, are to be presented at the meeting, if a specific
statement to that effect is made in the proxy statement or form of
proxy.
(4) Approval of the minutes of the prior meeting if such approval
does not amount to ratification of the action taken at that meeting;
(5) The election of any person to any office for which a bona fide
nominee is named in the proxy statement and such nominee is unable to
serve or for good cause will not serve.
(6) Any proposal omitted from the proxy statement and form of proxy
pursuant to Sec. 240.14a-8 or Sec. 240.14a-9 of this chapter.
(7) Matters incident to the conduct of the meeting.
(d) No proxy shall confer authority:
(1) To vote for the election of any person to any office for which a
bona fide nominee is not named in the proxy statement,
(2) To vote at any annual meeting other than the next annual meeting
(or any adjournment thereof) to be held after the date on which the
proxy statement and form of proxy are first sent or given to security
holders,
(3) To vote with respect to more than one meeting (and any
adjournment thereof) or more than one consent solicitation or
(4) To consent to or authorize any action other than the action
proposed to be taken in the proxy statement, or matters referred to in
paragraph (c) of this rule. A person shall not be deemed to be a bona
fide nominee and he shall not be named as such unless he has consented
to being named in the proxy statement and to serve if elected. Provided,
however, That nothing in this section 240.14a-4 shall prevent any person
soliciting in support of nominees who, if elected, would constitute a
minority of the board of directors, from seeking authority to vote for
nominees named in the registrant's proxy statement, so long as the
soliciting party:
(i) Seeks authority to vote in the aggregate for the number of
director positions then subject to election;
(ii) Represents that it will vote for all the registrant nominees,
other than those registrant nominees specified by the soliciting party;
(iii) Provides the security holder an opportunity to withhold
authority with respect to any other registrant nominee by writing the
name of that nominee on the form of proxy; and
(iv) States on the form of proxy and in the proxy statement that
there is no assurance that the registrant's nominees will serve if
elected with any of the soliciting party's nominees.
(e) The proxy statement or form of proxy shall provide, subject to
reasonable specified conditions, that the shares represented by the
proxy will be voted and that where the person solicited specifies by
means of a ballot provided pursuant to paragraph (b) of this section a
choice with respect to any matter to be acted upon, the shares will be
voted in accordance with the specifications so made.
(f) No person conducting a solicitation subject to this regulation
shall deliver a form of proxy, consent or authorization to any security
holder unless the security holder concurrently receives, or has
previously received, a definitive proxy statement that has been filed
with the Commission pursuant to Sec. 240.14a-6(b).
(Secs. 12, 13, 14, 15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1,
3, 8, 49 Stat. 1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68
Stat. 686; secs. 3, 4, 5, 6, 78, Stat. 565-568, 569, 570-574; secs. 1,
2, 3, 82 Stat. 454, 455, secs. 28(c), 1, 2, 3-5, 84 Stat. 1435, 1497;
secs. 10, 18, 89 Stat. 119, 155; sec. 308(b), 90 Stat. 57; sec. 204, 91
Stat. 1500; 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a))
[17 FR 11432, Dec. 18, 1952, as amended at 31 FR 212, Jan. 7, 1966; 32
FR 20963, Dec. 29, 1967; 44 FR 68770, Nov. 29, 1979; 45 FR 76979, Nov.
21, 1980; 51 FR 42060, Nov. 20, 1986; 57 FR 48291, Oct. 22, 1992; 59 FR
67764, Dec. 30, 1994; 63 FR 29118, May 28, 1998; 63 FR 50622, Sept. 22,
1998; 64 FR 61456, Nov. 10, 1999]
[[Page 170]]
Sec. 240.14a-5 Presentation of information in proxy statement.
(a) The information included in the proxy statement shall be clearly
presented and the statements made shall be divided into groups according
to subject matter and the various groups of statements shall be preceded
by appropriate headings. The order of items and sub-items in the
schedule need not be followed. Where practicable and appropriate, the
information shall be presented in tabular form. All amounts shall be
stated in figures. Information required by more than one applicable item
need not be repeated. No statement need be made in response to any item
or sub-item which is inapplicable.
(b) Any information required to be included in the proxy statement
as to terms of securities or other subject matter which from a
standpoint of practical necessity must be determined in the future may
be stated in terms of present knowledge and intention. To the extent
practicable, the authority to be conferred concerning each such matter
shall be confined within limits reasonably related to the need for
discretionary authority. Subject to the foregoing, information which is
not known to the persons on whose behalf the solicitation is to be made
and which it is not reasonably within the power of such persons to
ascertain or procure may be omitted, if a brief statement of the
circumstances rendering such information unavailable is made.
(c) Any information contained in any other proxy soliciting material
which has been furnished to each person solicited in connection with the
same meeting or subject matter may be omitted from the proxy statement,
if a clear reference is made to the particular document containing such
information.
(d)(1) All printed proxy statements shall be in roman type at least
as large and as legible as 10-point modern type, except that to the
extent necessary for convenient presentation financial statements and
other tabular data, but not the notes thereto, may be in roman type at
least as large and as legible as 8-point modern type. All such type
shall be leaded at least 2 points.
(2) Where a proxy statement is delivered through an electronic
medium, issuers may satisfy legibility requirements applicable to
printed documents, such as type size and font, by presenting all
required information in a format readily communicated to investors.
(e) All proxy statements shall disclose, under an appropriate
caption, the following dates:
(1) The deadline for submitting shareholder proposals for inclusion
in the registrant's proxy statement and form of proxy for the
registrant's next annual meeting, calculated in the manner provided in
Sec. 240.14a-8(e)(Question 5); and
(2) The date after which notice of a shareholder proposal submitted
outside the processes of Sec. 240.14a-8 is considered untimely, either
calculated in the manner provided by Sec. 240.14a-4(c)(1) or as
established by the registrant's advance notice provision, if any,
authorized by applicable state law.
(f) If the date of the next annual meeting is subsequently advanced
or delayed by more than 30 calendar days from the date of the annual
meeting to which the proxy statement relates, the registrant shall, in a
timely manner, inform shareholders of such change, and the new dates
referred to in paragraphs (e)(1) and (e)(2) of this section, by
including a notice, under Item 5, in its earliest possible quarterly
report on Form 10-Q (Sec. 249.308a of this chapter) or Form 10-QSB
(Sec. 249.308b of this chapter), or, in the case of investment
companies, in a shareholder report under Sec. 270.30d-1 of this chapter
under the Investment Company Act of 1940, or, if impracticable, any
means reasonably calculated to inform shareholders.
(Secs. 12, 13, 14, 15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1,
3, 8, 49 Stat. 1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68
Stat. 686; secs. 3, 4, 5, 6, 78, Stat. 565-568, 569, 570-574; secs. 1,
2, 3, 82 Stat. 454, 455, secs. 28(c), 1, 2, 3-5, 84 Stat. 1435, 1497;
secs. 10, 18, 89 Stat. 119, 155; sec. 308(b), 90 Stat. 57; sec. 204, 91
Stat. 1500; 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a))
[17 FR 11432, Dec. 18, 1952, as amended at 36 FR 8935, May 15, 1971; 37
FR 23179, Oct. 31, 1972; 44 FR 68770, Nov. 29, 1979; 51 FR 42061, Nov.
20, 1986; 61 FR 24656, May 15, 1996; 63 FR 29118, May 28, 1998; 63 FR
46881, Sept. 3, 1998]
[[Page 171]]
Sec. 240.14a-6 Filing requirements.
(a) Preliminary proxy statement. Five preliminary copies of the
proxy statement and form of proxy shall be filed with the Commission at
least 10 calendar days prior to the date definitive copies of such
material are first sent or given to security holders, or such shorter
period prior to that date as the Commission may authorize upon a showing
of good cause thereunder. A registrant, however, shall not file with the
Commission a preliminary proxy statement, form of proxy or other
soliciting material to be furnished to security holders concurrently
therewith if the solicitation relates to an annual (or special meeting
in lieu of the annual) meeting, or for an investment company registered
under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or a
business development company, if the solicitation relates to any meeting
of security holders at which the only matters to be acted upon are:
(1) The election of directors;
(2) The election, approval or ratification of accountant(s);
(3) A security holder proposal included pursuant to Rule 14a-8
(Sec. 240.14a-8 of this chapter);
(4) The approval or ratification of a plan as defined in paragraph
(a)(7)(ii) of Item 402 of Regulation S-K (Sec. 229.402(a)(7)(ii) of
this chapter) or amendments to such a plan;
(5) With respect to an investment company registered under the
Investment Company Act of 1940 or a business development company, a
proposal to continue, without change, any advisory or other contract or
agreement that previously has been the subject of a proxy solicitation
for which proxy material was filed with the Commission pursuant to this
section; and/or
(6) With respect to an open-end investment company registered under
the Investment Company Act of 1940, a proposal to increase the number of
shares authorized to be issued.
This exclusion from filing preliminary proxy material does not apply if
the registrant comments upon or refers to a solicitation in opposition
in connection with the meeting in its proxy material.
Note 1: The filing of revised material does not recommence the ten
day time period unless the revised material contains material revisions
or material new proposal(s) that constitute a fundamental change in the
proxy material.
Note 2: The official responsible for the preparation of the proxy
material should make every effort to verify the accuracy and
completeness of the information required by the applicable rules. The
preliminary material should be filed with the Commission at the earliest
practicable date.
Note 3: Solicitation in Opposition. For purposes of the exclusion
from filing preliminary proxy material, a ``solicitation in opposition''
includes: (a) Any solicitation opposing a proposal supported by the
registrant; and (b) any solicitation supporting a proposal that the
registrant does not expressly support, other than a security holder
proposal included in the registrant's proxy material pursuant to Rule
14a-8 (Sec. 240.14a-8 of this chapter). The inclusion of a security
holder proposal in the registrant's proxy material pursuant to Rule 14a-
8 does not constitute a ``solicitation in opposition,'' even if the
registrant opposes the proposal and/or includes a statement in
opposition to the proposal.
Note 4: A registrant that is filing proxy material in preliminary
form only because the registrant has commented on or referred to a
solicitation in opposition should indicate that fact in a transmittal
letter when filing the preliminary material with the Commission.
(b) Definitive proxy statement and other soliciting material. Eight
definitive copies of the proxy statement, form of proxy and all other
soliciting materials, in the same form as the materials sent to security
holders, must be filed with the Commission no later than the date they
are first sent or given to security holders. Three copies of these
materials also must be filed with, or mailed for filing to, each
national securities exchange on which the registrant has a class of
securities listed and registered.
(c) Personal solicitation materials. If part or all of the
solicitation involves personal solicitation, then eight copies of all
written instructions or other materials that discuss, review or comment
on the merits of any matter to be acted on, that are furnished to
persons making the actual solicitation for their use directly or
indirectly in connection with the solicitation, must be filed with the
Commission no later than the
[[Page 172]]
date the materials are first sent or given to these persons.
(d) Release dates. All preliminary proxy statements and forms of
proxy filed pursuant to paragraph (a) of this section shall be
accompanied by a statement of the date on which definitive copies
thereof filed pursuant to paragraph (b) of this section are intended to
be released to security holders. All definitive material filed pursuant
to paragraph (b) of this section shall be accompanied by a statement of
the date on which copies of such material were released to security
holders, or, if not released, the date on which copies thereof are
intended to be released. All material filed pursuant to paragraph (c) of
this section shall be accompanied by a statement of the date on which
copies thereof were released to the individual who will make the actual
solicitation or if not released, the date on which copies thereof are
intended to be released.
(e)(1) Public availability of information. All copies of preliminary
proxy statements and forms of proxy filed pursuant to paragraph (a) of
this section shall be clearly marked ``Preliminary Copies,'' and shall
be deemed immediately available for public inspection unless
confidential treatment is obtained pursuant to paragraph (e)(2) of this
section.
(2) Confidential treatment. If action will be taken on any matter
specified in Item 14 of Schedule 14A (Sec. 240.14a-101), all copies of
the preliminary proxy statement and form of proxy filed under paragraph
(a) of this section will be for the information of the Commission only
and will not be deemed available for public inspection until filed with
the Commission in definitive form so long as:
(i) The proxy statement does not relate to a matter or proposal
subject to Sec. 240.13e-3 or a roll-up transaction as defined in Item
901(c) of Regulation S-K (Sec. 229.901(c) of this chapter);
(ii) Neither the parties to the transaction nor any persons
authorized to act on their behalf have made any public communications
relating to the transaction except for statements where the content is
limited to the information specified in Sec. 230.135 of this chapter;
and
(iii) The materials are filed in paper and marked ``Confidential,
For Use of the Commission Only.'' In all cases, the materials may be
disclosed to any department or agency of the United States Government
and to the Congress, and the Commission may make any inquiries or
investigation into the materials as may be necessary to conduct an
adequate review by the Commission.
Instruction to paragraph (e)(2): If communications are made publicly
that go beyond the information specified in Sec. 230.135 of this
chapter, the preliminary proxy materials must be re-filed promptly with
the Commission as public materials.
(f) Communications not required to be filed. Copies of replies to
inquiries from security holders requesting further information and
copies of communications which do no more than request that forms of
proxy theretofore solicited be signed and returned need not be filed
pursuant to this section.
(g) Solicitations subject to Sec. 240.14a-2(b)(1). (1) Any person
who:
(i) Engages in a solicitation pursuant to Sec. 240.14a-2(b)(1), and
(ii) At the commencement of that solicitation owns beneficially
securities of the class which is the subject of the solicitation with a
market value of over $5 million,
shall furnish or mail to the Commission, not later than three days after
the date the written solicitation is first sent or given to any security
holder, five copies of a statement containing the information specified
in the Notice of Exempt Solicitation (Sec. 240.14a-103) which statement
shall attach as an exhibit all written soliciting materials. Five copies
of an amendment to such statement shall be furnished or mailed to the
Commission, in connection with dissemination of any additional
communications, not later than three days after the date the additional
material is first sent or given to any security holder. Three copies of
the Notice of Exempt Solicitation and amendments thereto shall, at the
same time the materials are furnished or mailed to the Commission, be
furnished or mailed to each national securities exchange upon which any
class of
[[Page 173]]
securities of the registrant is listed and registered.
(2) Notwithstanding paragraph (g)(1) of this section, no such
submission need be made with respect to oral solicitations (other than
with respect to scripts used in connection with such oral
solicitations), speeches delivered in a public forum, press releases,
published or broadcast opinions, statements, and advertisements
appearing in a broadcast media, or a newspaper, magazine or other bona
fide publication disseminated on a regular basis.
(h) Revised material. Where any proxy statement, form of proxy or
other material filed pursuant to this section is amended or revised, two
of the copies of such amended or revised material filed pursuant to this
section (or in the case of investment companies registered under the
Investment Company Act of 1940, three of such copies) shall be marked to
indicate clearly and precisely the changes effected therein. If the
amendment or revision alters the text of the material the changes in
such text shall be indicated by means of underscoring or in some other
appropriate manner.
(i) Fees. At the time of filing the proxy solicitation material, the
persons upon whose behalf the solicitation is made, other than
investment companies registered under the Investment Company Act of
1940, shall pay to the Commission the following applicable fee:
(1) For preliminary proxy material involving acquisitions, mergers,
spinoffs, consolidations or proposed sales or other dispositions of
substantially all the assets of the company, a fee established in
accordance with Rule 0-11 (Sec. 240.0-11 of this chapter) shall be
paid. No refund shall be given.
(2) For all other proxy submissions and submissions made pursuant to
Sec. 240.14a-6(g), no fee shall be required.
(j) Merger proxy materials. (1) Any proxy statement, form of proxy
or other soliciting material required to be filed by this section that
also is either
(i) Included in a registration statement filed under the Securities
Act of 1933 on Forms S-4 (Sec. 239.25 of this chapter), F-4 (Sec.
239.34 of this chapter) or N-14 (Sec. 239.23 of this chapter); or
(ii) Filed under Sec. 230.424, Sec. 230.425 or Sec. 230.497 of
this chapter is required to be filed only under the Securities Act, and
is deemed filed under this section.
(2) Under paragraph (j)(1) of this section, the fee required by
paragraph (i) of this section need not be paid.
(k) Computing time periods. In computing time periods beginning with
the filing date specified in Regulation 14A (Sec. Sec. 240.14a-1 to
240.14b-1 of this chapter), the filing date shall be counted as the
first day of the time period and midnight of the last day shall
constitute the end of the specified time period.
(l) Roll-up transactions. If a transaction is a roll-up transaction
as defined in Item 901(c) of Regulation S-K (17 CFR 229.901(c)) and is
registered (or authorized to be registered) on Form S-4 (17 CFR 229.25)
or Form F-4 (17 CFR 229.34), the proxy statement of the sponsor or the
general partner as defined in Item 901(d) and Item 901(a), respectively,
of Regulation S-K (17 CFR 229.901) must be distributed to security
holders no later than the lesser of 60 calendar days prior to the date
on which the meeting of security holders is held or action is taken, or
the maximum number of days permitted for giving notice under applicable
state law.
(m) Cover page. Proxy materials filed with the Commission shall
include a cover page in the form set forth in Schedule 14A (Sec.
240.14a-101 of this chapter). The cover page required by this paragraph
need not be distributed to security holders.
(n) Solicitations subject to Sec. 240.14a-2(b)(4). Any person who:
(1) Engages in a solicitation pursuant to Sec. 240.14a-2(b)(4); and
(2) At the commencement of that solicitation both owns five percent
(5%) or more of the outstanding securities of a class that is the
subject of the proposed roll-up transaction, and engages in the business
of buying and selling limited partnership interests in the secondary
market, shall furnish or mail to the Commission, not later than three
days after the date an oral or written solicitation by that person is
[[Page 174]]
first made, sent or provided to any security holder, five copies of a
statement containing the information specified in the Notice of Exempt
Preliminary Roll-up Communication (Sec. 240.14a-104). Five copies of
any amendment to such statement shall be furnished or mailed to the
Commission not later than three days after a communication containing
revised material is first made, sent or provided to any security holder.
(o) Solicitations before furnishing a definitive proxy statement.
Solicitations that are published, sent or given to security holders
before they have been furnished a definitive proxy statement must be
made in accordance with Sec. 240.14a-12 unless there is an exemption
available under Sec. 240.14a-2.
[17 FR 11432, Dec. 18, 1952]
Editorial Note: For Federal Register citations affecting Sec.
240.14a-6, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 240.14a-7 Obligations of registrants to provide a list of, or
mail soliciting material to, security holders.
(a) If the registrant has made or intends to make a proxy
solicitation in connection with a security holder meeting or action by
consent or authorization, upon the written request by any record or
beneficial holder of securities of the class entitled to vote at the
meeting or to execute a consent or authorization to provide a list of
security holders or to mail the requesting security holder's materials,
regardless of whether the request references this section, the
registrant shall:
(1) Deliver to the requesting security holder within five business
days after receipt of the request:
(i) Notification as to whether the registrant has elected to mail
the security holder's soliciting materials or provide a security holder
list if the election under paragraph (b) of this section is to be made
by the registrant;
(ii) A statement of the approximate number of record holders and
beneficial holders, separated by type of holder and class, owning
securities in the same class or classes as holders which have been or
are to be solicited on management's behalf, or any more limited group of
such holders designated by the security holder if available or
retrievable under the registrant's or its transfer agent's security
holder data systems; and
(iii) The estimated cost of mailing a proxy statement, form of proxy
or other communication to such holders, including to the extent known or
reasonably available, the estimated costs of any bank, broker, and
similar person through whom the registrant has solicited or intends to
solicit beneficial owners in connection with the security holder meeting
or action;
(2) Perform the acts set forth in either paragraphs (a)(2)(i) or
(a)(2)(ii) of this section, at the registrant's or requesting security
holder's option, as specified in paragraph (b) of this section:
(i) Mail copies of any proxy statement, form of proxy or other
soliciting material furnished by the security holder to the record
holders, including banks, brokers, and similar entities, designated by
the security holder. A sufficient number of copies must be mailed to the
banks, brokers, and similar entities for distribution to all beneficial
owners designated by the security holder. If the registrant has received
affirmative written or implied consent to deliver a single proxy
statement to security holders at a shared address in accordance with the
procedures in Sec. 240.14a-3(e)(1), a single copy of the proxy
statement furnished by the security holder shall be mailed to that
address. The registrant shall mail the security holder material with
reasonable promptness after tender of the material to be mailed,
envelopes or other containers therefor, postage or payment for postage
and other reasonable expenses of effecting such mailing. The registrant
shall not be responsible for the content of the material; or
(ii) Deliver the following information to the requesting security
holder within five business days of receipt of the request: a reasonably
current list of the names, addresses and security positions of the
record holders, including banks, brokers and similar entities holding
securities in the same class or classes as holders which have been or
are to be solicited on management's behalf, or any more limited group of
[[Page 175]]
such holders designated by the security holder if available or
retrievable under the registrant's or its transfer agent's security
holder data systems; the most recent list of names, addresses and
security positions of beneficial owners as specified in Sec. 240.14a-
13(b), in the possession, or which subsequently comes into the
possession, of the registrant; and the names of security holders at a
shared address that have consented to delivery of a single copy of proxy
materials to a shared address, if the registrant has received written or
implied consent in accordance with Sec. 240.14a-3(e)(1). All security
holder list information shall be in the form requested by the security
holder to the extent that such form is available to the registrant
without undue burden or expense. The registrant shall furnish the
security holder with updated record holder information on a daily basis
or, if not available on a daily basis, at the shortest reasonable
intervals, provided, however, the registrant need not provide beneficial
or record holder information more current than the record date for the
meeting or action.
(b)(1) The requesting security holder shall have the options set
forth in paragraph (a)(2) of this section, and the registrant shall have
corresponding obligations, if the registrant or general partner or
sponsor is soliciting or intends to solicit with respect to:
(i) A proposal that is subject to Sec. 240.13e-3;
(ii) A roll-up transaction as defined in Item 901(c) of Regulation
S-K (Sec. 229.901(c) of this chapter) that involves an entity with
securities registered pursuant to Section 12 of the Act (15 U.S.C. 78l);
or
(iii) A roll-up transaction as defined in Item 901(c) of Regulation
S-K (Sec. 229.901(c) of this chapter) that involves a limited
partnership, unless the transaction involves only:
(A) Partnerships whose investors will receive new securities or
securities in another entity that are not reported under a transaction
reporting plan declared effective before December 17, 1993 by the
Commission under Section 11A of the Act (15 U.S.C. 78k-1); or
(B) Partnerships whose investors' securities are reported under a
transaction reporting plan declared effective before December 17, 1993
by the Commission under Section 11A of the Act (15 U.S.C. 78k-1).
(2) With respect to all other requests pursuant to this section, the
registrant shall have the option to either mail the security holder's
material or furnish the security holder list as set forth in this
section.
(c) At the time of a list request, the security holder making the
request shall:
(1) If holding the registrant's securities through a nominee,
provide the registrant with a statement by the nominee or other
independent third party, or a copy of a current filing made with the
Commission and furnished to the registrant, confirming such holder's
beneficial ownership; and
(2) Provide the registrant with an affidavit, declaration,
affirmation or other similar document provided for under applicable
state law identifying the proposal or other corporate action that will
be the subject of the security holder's solicitation or communication
and attesting that:
(i) The security holder will not use the list information for any
purpose other than to solicit security holders with respect to the same
meeting or action by consent or authorization for which the registrant
is soliciting or intends to solicit or to communicate with security
holders with respect to a solicitation commenced by the registrant; and
(ii) The security holder will not disclose such information to any
person other than a beneficial owner for whom the request was made and
an employee or agent to the extent necessary to effectuate the
communication or solicitation.
(d) The security holder shall not use the information furnished by
the registrant pursuant to paragraph (a)(2)(ii) of this section for any
purpose other than to solicit security holders with respect to the same
meeting or action by consent or authorization for which the registrant
is soliciting or intends to solicit or to communicate with security
holders with respect to a solicitation commenced by the registrant; or
disclose such information to any person other than an employee, agent,
or beneficial owner for whom a request was
[[Page 176]]
made to the extent necessary to effectuate the communication or
solicitation. The security holder shall return the information provided
pursuant to paragraph (a)(2)(ii) of this section and shall not retain
any copies thereof or of any information derived from such information
after the termination of the solicitation.
(e) The security holder shall reimburse the reasonable expenses
incurred by the registrant in performing the acts requested pursuant to
paragraph (a) of this section.
Notes to Sec. 240.14a-7
1. Reasonably prompt methods of distribution to security holders may
be used instead of mailing. If an alternative distribution method is
chosen, the costs of that method should be considered where necessary
rather than the costs of mailing.
2. When providing the information required by Sec. 240.14a-
7(a)(1)(ii), if the registrant has received affirmative written or
implied consent to delivery of a single copy of proxy materials to a
shared address in accordance with Sec. 240.14a-3(e)(1), it shall
exclude from the number of record holders those to whom it does not have
to deliver a separate proxy statement.
[57 FR 48292, Oct. 22, 1992, as amended at 59 FR 63684, Dec. 8, 1994; 61
FR 24657, May 15, 1996; 65 FR 65750, Nov. 2, 2000]
Sec. 240.14a-8 Shareholder proposals.
This section addresses when a company must include a shareholder's
proposal in its proxy statement and identify the proposal in its form of
proxy when the company holds an annual or special meeting of
shareholders. In summary, in order to have your shareholder proposal
included on a company's proxy card, and included along with any
supporting statement in its proxy statement, you must be eligible and
follow certain procedures. Under a few specific circumstances, the
company is permitted to exclude your proposal, but only after submitting
its reasons to the Commission. We structured this section in a question-
and-answer format so that it is easier to understand. The references to
``you'' are to a shareholder seeking to submit the proposal.
(a) Question 1: What is a proposal? A shareholder proposal is your
recommendation or requirement that the company and/or its board of
directors take action, which you intend to present at a meeting of the
company's shareholders. Your proposal should state as clearly as
possible the course of action that you believe the company should
follow. If your proposal is placed on the company's proxy card, the
company must also provide in the form of proxy means for shareholders to
specify by boxes a choice between approval or disapproval, or
abstention. Unless otherwise indicated, the word ``proposal'' as used in
this section refers both to your proposal, and to your corresponding
statement in support of your proposal (if any).
(b) Question 2: Who is eligible to submit a proposal, and how do I
demonstrate to the company that I am eligible? (1) In order to be
eligible to submit a proposal, you must have continuously held at least
$2,000 in market value, or 1%, of the company's securities entitled to
be voted on the proposal at the meeting for at least one year by the
date you submit the proposal. You must continue to hold those securities
through the date of the meeting.
(2) If you are the registered holder of your securities, which means
that your name appears in the company's records as a shareholder, the
company can verify your eligibility on its own, although you will still
have to provide the company with a written statement that you intend to
continue to hold the securities through the date of the meeting of
shareholders. However, if like many shareholders you are not a
registered holder, the company likely does not know that you are a
shareholder, or how many shares you own. In this case, at the time you
submit your proposal, you must prove your eligibility to the company in
one of two ways:
(i) The first way is to submit to the company a written statement
from the ``record'' holder of your securities (usually a broker or bank)
verifying that, at the time you submitted your proposal, you
continuously held the securities for at least one year. You must also
include your own written statement that you intend to continue to hold
the securities through the date of the meeting of shareholders; or
(ii) The second way to prove ownership applies only if you have
filed a
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Schedule 13D (Sec. 240.13d-101), Schedule 13G (Sec. 240.13d-102), Form
3 (Sec. 249.103 of this chapter), Form 4 (Sec. 249.104 of this
chapter) and/or Form 5 (Sec. 249.105 of this chapter), or amendments to
those documents or updated forms, reflecting your ownership of the
shares as of or before the date on which the one-year eligibility period
begins. If you have filed one of these documents with the SEC, you may
demonstrate your eligibility by submitting to the company:
(A) A copy of the schedule and/or form, and any subsequent
amendments reporting a change in your ownership level;
(B) Your written statement that you continuously held the required
number of shares for the one-year period as of the date of the
statement; and
(C) Your written statement that you intend to continue ownership of
the shares through the date of the company's annual or special meeting.
(c) Question 3: How many proposals may I submit? Each shareholder
may submit no more than one proposal to a company for a particular
shareholders' meeting.
(d) Question 4: How long can my proposal be? The proposal, including
any accompanying supporting statement, may not exceed 500 words.
(e) Question 5: What is the deadline for submitting a proposal? (1)
If you are submitting your proposal for the company's annual meeting,
you can in most cases find the deadline in last year's proxy statement.
However, if the company did not hold an annual meeting last year, or has
changed the date of its meeting for this year more than 30 days from
last year's meeting, you can usually find the deadline in one of the
company's quarterly reports on Form 10-Q (Sec. 249.308a of this
chapter) or 10-QSB (Sec. 249.308b of this chapter), or in shareholder
reports of investment companies under Sec. 270.30d-1 of this chapter of
the Investment Company Act of 1940. In order to avoid controversy,
shareholders should submit their proposals by means, including
electronic means, that permit them to prove the date of delivery.
(2) The deadline is calculated in the following manner if the
proposal is submitted for a regularly scheduled annual meeting. The
proposal must be received at the company's principal executive offices
not less than 120 calendar days before the date of the company's proxy
statement released to shareholders in connection with the previous
year's annual meeting. However, if the company did not hold an annual
meeting the previous year, or if the date of this year's annual meeting
has been changed by more than 30 days from the date of the previous
year's meeting, then the deadline is a reasonable time before the
company begins to print and mail its proxy materials.
(3) If you are submitting your proposal for a meeting of
shareholders other than a regularly scheduled annual meeting, the
deadline is a reasonable time before the company begins to print and
mail its proxy materials.
(f) Question 6: What if I fail to follow one of the eligibility or
procedural requirements explained in answers to Questions 1 through 4 of
this section? (1) The company may exclude your proposal, but only after
it has notified you of the problem, and you have failed adequately to
correct it. Within 14 calendar days of receiving your proposal, the
company must notify you in writing of any procedural or eligibility
deficiencies, as well as of the time frame for your response. Your
response must be postmarked, or transmitted electronically, no later
than 14 days from the date you received the company's notification. A
company need not provide you such notice of a deficiency if the
deficiency cannot be remedied, such as if you fail to submit a proposal
by the company's properly determined deadline. If the company intends to
exclude the proposal, it will later have to make a submission under
Sec. 240.14a-8 and provide you with a copy under Question 10 below,
Sec. 240.14a-8(j).
(2) If you fail in your promise to hold the required number of
securities through the date of the meeting of shareholders, then the
company will be permitted to exclude all of your proposals from its
proxy materials for any meeting held in the following two calendar
years.
(g) Question 7: Who has the burden of persuading the Commission or
its staff that my proposal can be excluded? Except as otherwise noted,
the burden is
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on the company to demonstrate that it is entitled to exclude a proposal.
(h) Question 8: Must I appear personally at the shareholders'
meeting to present the proposal? (1) Either you, or your representative
who is qualified under state law to present the proposal on your behalf,
must attend the meeting to present the proposal. Whether you attend the
meeting yourself or send a qualified representative to the meeting in
your place, you should make sure that you, or your representative,
follow the proper state law procedures for attending the meeting and/or
presenting your proposal.
(2) If the company holds its shareholder meeting in whole or in part
via electronic media, and the company permits you or your representative
to present your proposal via such media, then you may appear through
electronic media rather than traveling to the meeting to appear in
person.
(3) If you or your qualified representative fail to appear and
present the proposal, without good cause, the company will be permitted
to exclude all of your proposals from its proxy materials for any
meetings held in the following two calendar years.
(i) Question 9: If I have complied with the procedural requirements,
on what other bases may a company rely to exclude my proposal? (1)
Improper under state law: If the proposal is not a proper subject for
action by shareholders under the laws of the jurisdiction of the
company's organization;
Note to paragraph (i)(1): Depending on the subject matter, some
proposals are not considered proper under state law if they would be
binding on the company if approved by shareholders. In our experience,
most proposals that are cast as recommendations or requests that the
board of directors take specified action are proper under state law.
Accordingly, we will assume that a proposal drafted as a recommendation
or suggestion is proper unless the company demonstrates otherwise.
(2) Violation of law: If the proposal would, if implemented, cause
the company to violate any state, federal, or foreign law to which it is
subject;
Note to paragraph (i)(2):
We will not apply this basis for exclusion to permit exclusion of a
proposal on grounds that it would violate foreign law if compliance with
the foreign law would result in a violation of any state or federal law.
(3) Violation of proxy rules: If the proposal or supporting
statement is contrary to any of the Commission's proxy rules, including
Sec. 240.14a-9, which prohibits materially false or misleading
statements in proxy soliciting materials;
(4) Personal grievance; special interest: If the proposal relates to
the redress of a personal claim or grievance against the company or any
other person, or if it is designed to result in a benefit to you, or to
further a personal interest, which is not shared by the other
shareholders at large;
(5) Relevance: If the proposal relates to operations which account
for less than 5 percent of the company's total assets at the end of its
most recent fiscal year, and for less than 5 percent of its net earnings
and gross sales for its most recent fiscal year, and is not otherwise
significantly related to the company's business;
(6) Absence of power/authority: If the company would lack the power
or authority to implement the proposal;
(7) Management functions: If the proposal deals with a matter
relating to the company's ordinary business operations;
(8) Relates to election: If the proposal relates to an election for
membership on the company's board of directors or analogous governing
body;
(9) Conflicts with company's proposal: If the proposal directly
conflicts with one of the company's own proposals to be submitted to
shareholders at the same meeting;
Note to paragraph (i)(9): A company's submission to the Commission
under this section should specify the points of conflict with the
company's proposal.
(10) Substantially implemented: If the company has already
substantially implemented the proposal;
(11) Duplication: If the proposal substantially duplicates another
proposal previously submitted to the company by another proponent that
will be included in the company's proxy materials for the same meeting;
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(12) Resubmissions: If the proposal deals with substantially the
same subject matter as another proposal or proposals that has or have
been previously included in the company's proxy materials within the
preceding 5 calendar years, a company may exclude it from its proxy
materials for any meeting held within 3 calendar years of the last time
it was included if the proposal received:
(i) Less than 3% of the vote if proposed once within the preceding 5
calendar years;
(ii) Less than 6% of the vote on its last submission to shareholders
if proposed twice previously within the preceding 5 calendar years; or
(iii) Less than 10% of the vote on its last submission to
shareholders if proposed three times or more previously within the
preceding 5 calendar years; and
(13) Specific amount of dividends: If the proposal relates to
specific amounts of cash or stock dividends.
(j) Question 10: What procedures must the company follow if it
intends to exclude my proposal? (1) If the company intends to exclude a
proposal from its proxy materials, it must file its reasons with the
Commission no later than 80 calendar days before it files its definitive
proxy statement and form of proxy with the Commission. The company must
simultaneously provide you with a copy of its submission. The Commission
staff may permit the company to make its submission later than 80 days
before the company files its definitive proxy statement and form of
proxy, if the company demonstrates good cause for missing the deadline.
(2) The company must file six paper copies of the following:
(i) The proposal;
(ii) An explanation of why the company believes that it may exclude
the proposal, which should, if possible, refer to the most recent
applicable authority, such as prior Division letters issued under the
rule; and
(iii) A supporting opinion of counsel when such reasons are based on
matters of state or foreign law.
(k) Question 11: May I submit my own statement to the Commission
responding to the company's arguments?
Yes, you may submit a response, but it is not required. You should
try to submit any response to us, with a copy to the company, as soon as
possible after the company makes its submission. This way, the
Commission staff will have time to consider fully your submission before
it issues its response. You should submit six paper copies of your
response.
(l) Question 12: If the company includes my shareholder proposal in
its proxy materials, what information about me must it include along
with the proposal itself?
(1) The company's proxy statement must include your name and
address, as well as the number of the company's voting securities that
you hold. However, instead of providing that information, the company
may instead include a statement that it will provide the information to
shareholders promptly upon receiving an oral or written request.
(2) The company is not responsible for the contents of your proposal
or supporting statement.
(m) Question 13: What can I do if the company includes in its proxy
statement reasons why it believes shareholders should not vote in favor
of my proposal, and I disagree with some of its statements?
(1) The company may elect to include in its proxy statement reasons
why it believes shareholders should vote against your proposal. The
company is allowed to make arguments reflecting its own point of view,
just as you may express your own point of view in your proposal's
supporting statement.
(2) However, if you believe that the company's opposition to your
proposal contains materially false or misleading statements that may
violate our anti-fraud rule, Sec. 240.14a-9, you should promptly send
to the Commission staff and the company a letter explaining the reasons
for your view, along with a copy of the company's statements opposing
your proposal. To the extent possible, your letter should include
specific factual information demonstrating the inaccuracy of the
company's claims. Time permitting, you may wish to try to work out your
differences with the company by yourself
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before contacting the Commission staff.
(3) We require the company to send you a copy of its statements
opposing your proposal before it mails its proxy materials, so that you
may bring to our attention any materially false or misleading
statements, under the following timeframes:
(i) If our no-action response requires that you make revisions to
your proposal or supporting statement as a condition to requiring the
company to include it in its proxy materials, then the company must
provide you with a copy of its opposition statements no later than 5
calendar days after the company receives a copy of your revised
proposal; or
(ii) In all other cases, the company must provide you with a copy of
its opposition statements no later than 30 calendar days before its
files definitive copies of its proxy statement and form of proxy under
Sec. 240.14a-6.
[63 FR 29119, May 28, 1998; 63 FR 50622, 50623, Sept. 22, 1998]
Sec. 240.14a-9 False or misleading statements.
(a) No solicitation subject to this regulation shall be made by
means of any proxy statement, form of proxy, notice of meeting or other
communication, written or oral, containing any statement which, at the
time and in the light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or which omits to
state any material fact necessary in order to make the statements
therein not false or misleading or necessary to correct any statement in
any earlier communication with respect to the solicitation of a proxy
for the same meeting or subject matter which has become false or
misleading.
(b) The fact that a proxy statement, form of proxy or other
soliciting material has been filed with or examined by the Commission
shall not be deemed a finding by the Commission that such material is
accurate or complete or not false or misleading, or that the Commission
has passed upon the merits of or approved any statement contained
therein or any matter to be acted upon by security holders. No
representation contrary to the foregoing shall be made.
Note: The following are some examples of what, depending upon
particular facts and circumstances, may be misleading within the meaning
of this section.
(a) Predictions as to specific future market values.
(b) Material which directly or indirectly impugns character,
integrity or personal reputation, or directly or indirectly makes
charges concerning improper, illegal or immoral conduct or associations,
without factual foundation.
(c) Failure to so identify a proxy statement, form of proxy and
other soliciting material as to clearly distinguish it from the
soliciting material of any other person or persons soliciting for the
same meeting or subject matter.
(d) Claims made prior to a meeting regarding the results of a
solicitation.
(Secs. 19(a), 3(b), 23(a)(1), 20, 319(a), 48 Stat. 85, 882, 901; sec.
209, 48 Stat. 908; 49 Stat. 833; sec. 203(a), 49 Stat. 704; sec. 8, 49
Stat. 1379; 53 Stat. 1173; secs. 3, 18, 89 Stat. 97, 155; sec.
308(a)(2), 90 Stat. 57; 15 U.S.C. 77s(a), 78c(b), 78w(a)(1), 79t,
77sss(a))
[31 FR 212, Jan. 7, 1966, as amended at 41 FR 19933, May 14, 1976; 44 FR
38815, July 2, 1979; 44 FR 68456, Nov. 29, 1979]
Sec. 240.14a-10 Prohibition of certain solicitations.
No person making a solicitation which is subject to Sec. Sec.
240.14a-1 to 240.14a-10 shall solicit:
(a) Any undated or postdated proxy; or
(b) Any proxy which provides that it shall be deemed to be dated as
of any date subsequent to the date on which it is signed by the security
holder.
[17 FR 11434, Dec. 18, 1952]
Sec. 240.14a-11 [Reserved]
Sec. 240.14a-12 Solicitation before furnishing a proxy statement.
(a) Notwithstanding the provisions of Sec. 240.14a-3(a), a
solicitation may be made before furnishing security holders with a proxy
statement meeting the requirements of Sec. 240.14a-3(a) if:
(1) Each written communication includes:
(i) The identity of the participants in the solicitation (as defined
in Instruction 3 to Item 4 of Schedule 14A (Sec. 240.14a-101)) and a
description of their direct or indirect interests, by security
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holdings or otherwise, or a prominent legend in clear, plain language
advising security holders where they can obtain that information; and
(ii) A prominent legend in clear, plain language advising security
holders to read the proxy statement when it is available because it
contains important information. The legend also must explain to
investors that they can get the proxy statement, and any other relevant
documents, for free at the Commission's web site and describe which
documents are available free from the participants; and
(2) A definitive proxy statement meeting the requirements of Sec.
240.14a-3(a) is sent or given to security holders solicited in reliance
on this section before or at the same time as the forms of proxy,
consent or authorization are furnished to or requested from security
holders.
(b) Any soliciting material published, sent or given to security
holders in accordance with paragraph (a) of this section must be filed
with the Commission no later than the date the material is first
published, sent or given to security holders. Three copies of the
material must at the same time be filed with, or mailed for filing to,
each national securities exchange upon which any class of securities of
the registrant is listed and registered. The soliciting material must
include a cover page in the form set forth in Schedule 14A (Sec.
240.14a-101) and the appropriate box on the cover page must be marked.
Soliciting material in connection with a registered offering is required
to be filed only under Sec. 230.424 or Sec. 230.425 of this chapter,
and will be deemed filed under this section.
(c) Solicitations by any person or group of persons for the purpose
of opposing a solicitation subject to this regulation by any other
person or group of persons with respect to the election or removal of
directors at any annual or special meeting of security holders also are
subject to the following provisions:
(1) Application of this rule to annual report. Notwithstanding the
provisions of Sec. 240.14a-3 (b) and (c), any portion of the annual
report referred to in Sec. 240.14a-3(b) that comments upon or refers to
any solicitation subject to this rule, or to any participant in the
solicitation, other than the solicitation by the management, must be
filed with the Commission as proxy material subject to this regulation.
This must be filed in electronic format unless an exemption is available
under Rules 201 or 202 of Regulation S-T (Sec. 232.201 or Sec. 232.202
of this chapter).
(2) Use of reprints or reproductions. In any solicitation subject to
this Sec. 240.14a-12(c), soliciting material that includes, in whole or
part, any reprints or reproductions of any previously published material
must:
(i) State the name of the author and publication, the date of prior
publication, and identify any person who is quoted without being named
in the previously published material.
(ii) Except in the case of a public or official document or
statement, state whether or not the consent of the author and
publication has been obtained to the use of the previously published
material as proxy soliciting material.
(iii) If any participant using the previously published material, or
anyone on his or her behalf, paid, directly or indirectly, for the
preparation or prior publication of the previously published material,
or has made or proposes to make any payments or give any other
consideration in connection with the publication or republication of the
material, state the circumstances.
Instructions to Sec. 240.14a-12:
1. If paper filing is permitted, file eight copies of the soliciting
material with the Commission, except that only three copies of the
material specified by Sec. 240.14a-12(c)(1) need be filed.
2. Any communications made under this section after the definitive
proxy statement is on file but before it is disseminated also must
specify that the proxy statement is publicly available and the
anticipated date of dissemination.
[64 FR 61456, Nov. 10, 1999]
Sec. 240.14a-13 Obligation of registrants in communicating with
beneficial owners.
(a) If the registrant knows that securities of any class entitled to
vote at a meeting (or by written consents or authorizations if no
meeting is held) with respect to which the registrant intends to solicit
proxies, consents or authorizations are held of record by a broker,
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dealer, voting trustee, bank, association, or other entity that
exercises fiduciary powers in nominee name or otherwise, the registrant
shall:
(1) By first class mail or other equally prompt means:
(i) Inquire of each such record holder:
(A) Whether other persons are the beneficial owners of such
securities and if so, the number of copies of the proxy and other
soliciting material necessary to supply such material to such beneficial
owners;
(B) In the case of an annual (or special meeting in lieu of the
annual) meeting, or written consents in lieu of such meeting, at which
directors are to be elected, the number of copies of the annual report
to security holders necessary to supply such report to beneficial owners
to whom such reports are to be distributed by such record holder or its
nominee and not by the registrant;
(C) If the record holder has an obligation under Sec. 240.14b-
1(b)(3) or Sec. 240.14b-2(b)(4)(ii) and (iii), whether an agent has
been designated to act on its behalf in fulfilling such obligation and,
if so, the name and address of such agent; and
(D) Whether it holds the registrant's securities on behalf of any
respondent bank and, if so, the name and address of each such respondent
bank; and
(ii) Indicate to each such record holder:
(A) Whether the registrant, pursuant to paragraph (c) of this
section, intends to distribute the annual report to security holders to
beneficial owners of its securities whose names, addresses and
securities positions are disclosed pursuant to Sec. 240.14b-1(b)(3) or
Sec. 240.14b-2(b)(4)(ii) and (iii);
(B) The record date; and
(C) At the option of the registrant, any employee benefit plan
established by an affiliate of the registrant that holds securities of
the registrant that the registrant elects to treat as exempt employee
benefit plan securities;
(2) Upon receipt of a record holder's or respondent bank's response
indicating, pursuant to Sec. 240.14b-2(b)(1)(i), the names and
addresses of its respondent banks, within one business day after the
date such response is received, make an inquiry of and give notification
to each such respondent bank in the same manner required by paragraph
(a)(1) of this section; Provided, however, the inquiry required by
paragraphs (a)(1) and (a)(2) of this section shall not cover beneficial
owners of exempt employee benefit plan securities;
(3) Make the inquiry required by paragraph (a)(1) of this section at
least 20 business days prior to the record date of the meeting of
security holders, or
(i) If such inquiry is impracticable 20 business days prior to the
record date of a special meeting, as many days before the record date of
such meeting as is practicable or,
(ii) If consents or authorizations are solicited, and such inquiry
is impracticable 20 business days before the earliest date on which they
may be used to effect corporate action, as many days before that date as
is practicable, or
(iii) At such later time as the rules of a national securities
exchange on which the class of securities in question is listed may
permit for good cause shown; Provided, however, That if a record holder
or respondent bank has informed the registrant that a designated
office(s) or department(s) is to receive such inquiries, the inquiry
shall be made to such designated office(s) or department(s); and
(4) Supply, in a timely manner, each record holder and respondent
bank of whom the inquiries required by paragraphs (a)(1) and (a)(2) of
this section are made with copies of the proxy, other proxy soliciting
material, and/or the annual report to security holders, in such
quantities, assembled in such form and at such place(s), as the record
holder or respondent bank may reasonably request in order to send such
material to each beneficial owner of securities who is to be furnished
with such material by the record holder or respondent bank; and
(5) Upon the request of any record holder or respondent bank that is
supplied with proxy soliciting material and/or annual reports to
security holders pursuant to paragraph (a)(4) of this section, pay its
reasonable expenses for completing the mailing of such material to
beneficial owners.
[[Page 183]]
Note 1: If the registrant's list of security holders indicates that
some of its securities are registered in the name of a clearing agency
registered pursuant to Section 17A of the Act (e.g., ``Cede & Co.,''
nominee for the Depository Trust Company), the registrant shall make
appropriate inquiry of the clearing agency and thereafter of the
participants in such clearing agency who may hold on behalf of a
beneficial owner or respondent bank, and shall comply with the above
paragraph with respect to any such participant (see Sec. 240.14a-1(i)).
Note 2: The attention of registrants is called to the fact that each
broker, dealer, bank, association, and other entity that exercises
fiduciary powers has an obligation pursuant to Sec. 240.14b-1 and Sec.
240.14b-2 (except as provided therein with respect to exempt employee
benefit plan securities held in nominee name) and, with respect to
brokers and dealers, applicable self-regulatory organization
requirements to obtain and forward, within the time periods prescribed
therein, (a) proxies (or in lieu thereof requests for voting
instructions) and proxy soliciting materials to beneficial owners on
whose behalf it holds securities, and (b) annual reports to security
holders to beneficial owners on whose behalf it holds securities, unless
the registrant has notified the record holder or respondent bank that it
has assumed responsibility to mail such material to beneficial owners
whose names, addresses, and securities positions are disclosed pursuant
to Sec. 240.14b-1(b)(3) and Sec. 240.14b-2(b)(4)(ii) and (iii).
Note 3: The attention of registrants is called to the fact that
registrants have an obligation, pursuant to paragraph (d) of this
section, to cause proxies (or in lieu thereof requests for voting
instructions), proxy soliciting material and annual reports to security
holders to be furnished, in a timely manner, to beneficial owners of
exempt employee benefit plan securities.
(b) Any registrant requesting pursuant to Sec. 240.14b-1(b)(3) or
Sec. 240.14b-2(b)(4)(ii) and (iii) a list of names, addresses and
securities positions of beneficial owners of its securities who either
have consented or have not objected to disclosure of such information
shall:
(1) By first class mail or other equally prompt means, inquire of
each record holder and each respondent bank identified to the registrant
pursuant to Sec. 240.14b-2(b)(4)(i) whether such record holder or
respondent bank holds the registrant's securities on behalf of any
respondent banks and, if so, the name and address of each such
respondent bank;
(2) Request such list to be compiled as of a date no earlier than
five business days after the date the registrant's request is received
by the record holder or respondent bank; Provided, however, That if the
record holder or respondent bank has informed the registrant that a
designated office(s) or department(s) is to receive such requests, the
request shall be made to such designated office(s) or department(s);
(3) Make such request to the following persons that hold the
registrant's securities on behalf of beneficial owners: all brokers,
dealers, banks, associations and other entities that exercises fiduciary
powers; Provided however, such request shall not cover beneficial owners
of exempt employee benefit plan securities as defined in Sec. 240.14a-
1(d)(1); and, at the option of the registrant, such request may give
notice of any employee benefit plan established by an affiliate of the
registrant that holds securities of the registrant that the registrant
elects to treat as exempt employee benefit plan securities;
(4) Use the information furnished in response to such request
exclusively for purposes of corporate communications; and
(5) Upon the request of any record holder or respondent bank to whom
such request is made, pay the reasonable expenses, both direct and
indirect, of providing beneficial owner information.
Note: A registrant will be deemed to have satisfied its obligations
under paragraph (b) of this section by requesting consenting and non-
objecting beneficial owner lists from a designated agent acting on
behalf of the record holder or respondent bank and paying to that
designated agent the reasonable expenses of providing the beneficial
owner information.
(c) A registrant, at its option, may mail its annual report to
security holders to the beneficial owners whose identifying information
is provided by record holders and respondent banks, pursuant to Sec.
240.14b-1(b)(3) or Sec. 240.14b-2(b)(4)(ii) and (iii), provided that
such registrant notifies the record holders and respondent banks, at the
time it
[[Page 184]]
makes the inquiry required by paragraph (a) of this section, that the
registrant will mail the annual report to security holders to the
beneficial owners so identified.
(d) If a registrant solicits proxies, consents or authorizations
from record holders and respondent banks who hold securities on behalf
of beneficial owners, the registrant shall cause proxies (or in lieu
thereof requests or voting instructions), proxy soliciting material and
annual reports to security holders to be furnished, in a timely manner,
to beneficial owners of exempt employee benefit plan securities.
[51 FR 44276, Dec. 9, 1986; 52 FR 2220, Jan. 21, 1987, as amended at 52
FR 23648, June 24, 1987; 53 FR 16405, May 9, 1988; 57 FR 1099, Jan. 10,
1992]
Sec. 240.14a-14 Modified or superseded documents.
(a) Any statement contained in a document incorporated or deemed to
be incorporated by reference shall be deemed to be modified or
superseded, for purposes of the proxy statement, to the extent that a
statement contained in the proxy statement or in any other subsequently
filed document that also is or is deemed to be incorporated by reference
modifies or replaces such statement.
(b) The modifying or superseding statement may, but need not, state
it has modified or superseded a prior statement or include any other
information set forth in the document that is not so modified or
superseded. The making of a modifying or superseding statement shall not
be deemed an admission that the modified or superseded statement, when
made, constituted an untrue statement of a material fact, an omission to
state a material fact necessary to make a statement not misleading, or
the employment of a manipulative, deceptive, or fraudulent device,
contrivance, scheme, transaction, act, practice, course of business or
artifice to defraud, as those terms are used in the Securities Act of
1933, the Securities Exchange Act of 1934 (``the Act''), the Public
Utility Holding Company Act of 1935, the Investment Company Act of 1940,
or the rules and regulations thereunder.
(c) Any statement so modified shall not be deemed in its unmodified
form to constitute part of the proxy statement for purposes of the Act.
Any statement so superseded shall not be deemed to constitute a part of
the proxy statement for purposes of the Act.
[52 FR 21936, June 10, 1987]
Sec. 240.14a-15 Differential and contingent compensation in connection
with roll-up transactions.
(a) It shall be unlawful for any person to receive compensation for
soliciting proxies, consents, or authorizations directly from security
holders in connection with a roll-up transaction as provided in
paragraph (b) of this section, if the compensation is:
(1) Based on whether the solicited proxy, consent, or authorization
either approves or disapproves the proposed roll-up transaction; or
(2) Contingent on the approval, disapproval, or completion of the
roll-up transaction.
(b) This section is applicable to a roll-up transaction as defined
in Item 901(c) of Regulation S-K (Sec. 229.901(c) of this chapter),
except for a transaction involving only:
(1) Finite-life entities that are not limited partnerships;
(2) Partnerships whose investors will receive new securities or
securities in another entity that are not reported under a transaction
reporting plan declared effective before December 17, 1993 by the
Commission under section 11A of the Act (15 U.S.C. 78k-1); or
(3) Partnerships whose investors' securities are reported under a
transaction reporting plan declared effective before December 17, 1993
by the Commission under section 11A of the Act (15 U.S.C. 78k-1).
[59 FR 63684, Dec. 8, 1994]
Sec. 240.14a-101 Schedule 14A. Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. )
Filed by the Registrant [ ]
Filed by a party other than the Registrant [ ]
[[Page 185]]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Sec. 240.14a-12
________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
Notes
Notes: A. Where any item calls for information with respect to any
matter to be acted upon and such matter involves other matters with
respect to which information is called for by other items of this
schedule, the information called for by such other items also shall be
given. For example, where a solicitation of security holders is for the
purpose of approving the authorization of additional securities which
are to be used to acquire another specified company, and the
registrants' security holders will not have a separate opportunity to
vote upon the transaction, the solicitation to authorize the securities
is also a solicitation with respect to the acquisition. Under those
facts, information required by Items 11, 13 and 14 shall be furnished.
B. Where any item calls for information with respect to any matter
to be acted upon at the meeting, such item need be answered in the
registrant's soliciting material only with respect to proposals to be
made by or on behalf of the registrant.
C. Except as otherwise specifically provided, where any item calls
for information for a specified period with regard to directors,
executive officers, officers or other persons holding specified
positions or relationships, the information shall be given with regard
to any person who held any of the specified positions or relationships
at any time during the period. Information need not be included for any
portion of the period during which such person did not hold any such
position or relationship, provided a statement to that effect is made.
D. Information may be incorporated by reference only in the manner
and to the extent specifically permitted in the items of this schedule.
Where incorporation by reference is used, the following shall apply:
1. Any incorporation by reference of information pursuant to the
provisions of this schedule shall be subject to the provisions of Sec.
228.10(f) and Sec. 229.10(d) of this chapter restricting incorporation
by reference of documents which incorporate by reference other
information. A registrant incorporating any documents, or portions of
documents, shall include a statement on the last page(s) of the proxy
statement as to which documents, or portions of documents, are
incorporated by reference. Information shall not be incorporated by
reference in any case where such incorporation would render the
statement incomplete, unclear or confusing.
2. If a document is incorporated by reference but not delivered to
security holders, include an undertaking to provide, without charge, to
each person to whom a proxy statement is delivered, upon written or oral
request of such person and by first class mail or other equally prompt
means within one business day of receipt of such request, a copy of any
and all of the information that has been incorporated by reference in
the proxy statement (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically
incorporated by reference into the information that the proxy statement
incorporates), and the address (including title or department) and
telephone numbers to which such
[[Page 186]]
a request is to be directed. This includes information contained in
documents filed subsequent to the date on which definitive copies of the
proxy statement are sent or given to security holders, up to the date of
responding to the request.
3. If a document or portion of a document other than an annual
report sent to security holders pursuant to the requirements of Rule
14a-3 (Sec. 240.14a-3 of this chapter) with respect to the same meeting
or solicitation of consents or authorizations as that to which the proxy
statement relates is incorporated by reference in the manner permitted
by Item 13(b) or 14(e)(1) of this schedule, the proxy statement must be
sent to security holders no later than 20 business days prior to the
date on which the meeting of such security holders is held or, if no
meeting is held, at least 20 business days prior to the date the votes,
consents or authorizations may be used to effect the corporate action.
4. Electronic filings. If any of the information required by Items
13 or 14 of this Schedule is incorporated by reference from an annual or
quarterly report to security holders, such report, or any portion
thereof incorporated by reference, shall be filed in electronic format
with the proxy statement. This provision shall not apply to registered
investment companies.
E. In Item 13 of this Schedule, the reference to ``meets the
requirements of Form S-2'' shall refer to a registrant which meets the
requirements for use of Form S-2 (Sec. 239.12 of this chapter) and the
reference to ``meets the requirement of Form S-3'' shall refer to a
registrant which meets the following requirements:
(1) The registrant meets the requirements of General Instruction
I.A. of Form S-3 (Sec. 239.13 of this chapter); and
(2) One of the following is met:
(i) The registrant meets the aggregate market value requirement of
General Instruction I.B.1 of Form S-3; or
(ii) Action is to be taken as described in Items 11, 12 and 14 of
this schedule which concerns non-convertible debt or preferred
securities which are ``investment grade securities'' as defined in
General Instruction I.B.2 of Form S-3, except that the time by which the
rating must be assigned shall be the date on which definitive copies of
the proxy statement are first sent or given to security holders; or
(iii) The registrant is a majority-owned subsidiary and one of the
conditions of General Instruction I.C. of Form S-3 is met.
F. Note to Small Business Issuers-- Registrants and acquirees that
meet the definition of ``small business issuer'' under Rule 12b-2 of the
Exchange Act (Sec. 240.12b-2) shall refer to the disclosure items in
Regulation S-B (Sec. 228.10 et seq. of this chapter) and not Regulation
S-K (Sec. 229.10 et seq. of this chapter). If there is no comparable
disclosure item in Regulation S-B, small business issuers need not
provide the information requested. Small business issuers shall provide
the financial information in Item 310 of Regulation S-B in lieu of the
financial statements required in Schedule 14A.
G. Special Note for Small Business Issuers
(1) Registrants and acquirees which meet the definition of ``small
business issuer'' in Rule 12b-2 of the Exchange Act and filed their
latest annual report in accordance with ``Information Required in Annual
Report of Transitional Small Business Issuers'' in Form 10-KSB shall
refer to this ``Special Note for Small Business Issuers'' with respect
to the specified items in this Schedule. If paragraph G(2) or G(3),
below, does not contain an alternative disclosure instruction, small
business issuers should comply with the disclosure item in this
schedule, as modified by Instruction F.
(2) Registrants and acquirees that relied upon Alternative 1 in
their most recent Form 10-KSB may provide the following information
(Question numbers are in reference to Model A of Form 1-A): (a)
Questions 37 and 38 instead of Item 6(d); (b) Question 43 instead of
Item 7(a); (c) Questions 29-36 and 39 instead of Item 7(b); (d)
Questions 40-42 instead of Item 8; (e) Questions 40-42 instead of Item
10; (f) the information required in Part F/S of Form 10-SB instead of
the financial statement requirements of Items 13 or 14; (g) Questions 4,
11, and 47-50 instead of Item 13(a)(1)(3); (h) Question 3 instead of the
information specified in Items 101 and 102 of Regulation S-B (Sec. Sec.
228.101 and 228.102 of this chapter); and (i) Questions 4, 11, and 47-50
instead of the information specified in Item 303 of Regulation S-B
(Sec. 228.303 of this chapter).
(3) Registrants and acquirees that relied upon Alternative 2 in
their most recent Form 10-KSB may provide the following information
(``Model B'' refers to Model B of Form 1-A): (a) Item 10 of Model B
instead of Item 6(d) of Schedule 14A; (b) Item 8(d) of Model B instead
of Item 7(a) of Schedule 14A; (c) Items 8(a)(8(c) and Item 11 of Model B
instead of Item 7(b) of Schedule 14A; (d) Item 9 of Model B instead of
Item 8 of Schedule 14A; (e) Item 9 of Model B instead of Item 10 of
Schedule 14A; (f) the information required in Part F/S of Form 10-SB
instead of the financial statements requirements of Items 13 or 14 of
Schedule 14A; (g) Item 6(a)(3)(i) of Model B instead of Item 13(a)(1)(3)
of Schedule 14A; (h) Items 6 and 7 of Model B instead of the information
specified in Items 101 and 102 of Regulation S-B (Sec. Sec. 228.101 and
228.102 of this chapter); and (i) Item 6(a)(3)(i) of Model B instead of
the information specified in Item 303 of Regulation S-B (Sec. 228.303
of this chapter).
Item 1. Date, time and place information. (a) State the date, time
and place of the meeting of security holders, and the complete
[[Page 187]]
mailing address, including ZIP Code, of the principal executive offices
of the registrant, unless such information is otherwise disclosed in
material furnished to security holders with or preceding the proxy
statement. If action is to be taken by written consent, state the date
by which consents are to be submitted if state law requires that such a
date be specified or if the person soliciting intends to set a date.
(b) On the first page of the proxy statement, as delivered to
security holders, state the approximate date on which the proxy
statement and form of proxy are first sent or given to security holders.
(c) Furnish the information required to be in the proxy statement by
Rule 14a-5(e) (Sec. 240.14a-5(e) of this chapter).
Item 2. Revocability of proxy. State whether or not the person
giving the proxy has the power to revoke it. If the right of revocation
before the proxy is exercised is limited or is subject to compliance
with any formal procedure, briefly describe such limitation or
procedure.
Item 3. Dissenters' right of appraisal. Outline briefly the rights
of appraisal or similar rights of dissenters with respect to any matter
to be acted upon and indicate any statutory procedure required to be
followed by dissenting security holders in order to perfect such rights.
Where such rights may be exercised only within a limited time after the
date of adoption of a proposal, the filing of a charter amendment or
other similar act, state whether the persons solicited will be notified
of such date.
Instructions. 1. Indicate whether a security holder's failure to
vote against a proposal will constitute a waiver of his appraisal or
similar rights and whether a vote against a proposal will be deemed to
satisfy any notice requirements under State law with respect to
appraisal rights. If the State law is unclear, state what position will
be taken in regard to these matters.
2. Open-end investment companies registered under the Investment
Company Act of 1940 are not required to respond to this item.
Item 4. Persons Making the Solicitation--a) Solicitations not
subject to Rule 14a-12(c) (Sec. 240.14a-12(c)). (1) If the solicitation
is made by the registrant, so state. Give the name of any director of
the registrant who has informed the registrant in writing that he
intends to oppose any action intended to be taken by the registrant and
indicate the action which he intends to oppose.
(2) If the solicitation is made otherwise than by the registrant, so
state and give the names of the participants in the solicitation, as
defined in paragraphs (a) (iii), (iv), (v) and (vi) of Instruction 3 to
this Item.
(3) If the solicitation is to be made otherwise than by the use of
the mails, describe the methods to be employed. If the solicitation is
to be made by specially, engaged employees or paid solicitors, state (i)
the material features of any contract or arrangement for such
solicitation and identify the parties, and (ii) the cost or anticipated
cost thereof.
(4) State the names of the persons by whom the cost of solicitation
has been or will be borne, directly or indirectly.
(b) Solicitations subject to Rule 14a-12(c) (Sec. 240.14a-12(c)).
(1) State by whom the solicitation is made and describe the methods
employed and to be employed to solicit security holders.
(2) If regular employees of the registrant or any other participant
in a solicitation have been or are to be employed to solicit security
holders, describe the class or classes of employees to be so employed,
and the manner and nature of their employment for such purpose.
(3) If specially engaged employees, representatives or other persons
have been or are to be employed to solicit security holders, state (i)
the material features of any contract or arrangement for such
solicitation and the identity of the parties, (ii) the cost or
anticipated cost thereof and (iii) the approximate number of such
employees of employees or any other person (naming such other person)
who will solicit security holders).
(4) State the total amount estimated to be spent and the total
expenditures to date for, in furtherance of, or in connection with the
solicitation of security holders.
(5) State by whom the cost of the solicitation will be borne. If
such cost is to be borne initially by any person other than the
registrant, state whether reimbursement will be sought from the
registrant, and, if so, whether the question of such reimbursement will
be submitted to a vote of security holders.
(6) If any such solicitation is terminated pursuant to a settlement
between the registrant and any other participant in such solicitation,
describe the terms of such settlement, including the cost or anticipated
cost thereof to the registrant.
Instructions. 1. With respect to solicitations subject to Rule 14a-
12(c) (Sec. 240.14a-12(c)), costs and expenditures within the meaning
of this Item 4 shall include fees for attorneys, accountants, public
relations or financial advisers, solicitors, advertising, printing,
transportation, litigation and other costs incidental to the
solicitation, except that the registrant may exclude the amount of such
costs represented by the amount normally expended for a solicitation for
an election of directors in the absence of a contest, and costs
represented by salaries and wages of regular employees and officers,
provided a statement to that effect is included in the proxy statement.
2. The information required pursuant to paragraph (b)(6) of this
Item should be included in any amended or revised proxy
[[Page 188]]
statement or other soliciting materials relating to the same meeting or
subject matter furnished to security holders by the registrant
subsequent to the date of settlement.
3. For purposes of this Item 4 and Item 5 of this Schedule 14A:
(a) The terms ``participant'' and ``participant in a solicitation''
include the following:
(i) The registrant;
(ii) Any director of the registrant, and any nominee for whose
election as a director proxies are solicited;
(iii) Any committee or group which solicits proxies, any member of
such committee or group, and any person whether or not named as a member
who, acting alone or with one or more other persons, directly or
indirectly takes the initiative, or engages, in organizing, directing,
or arranging for the financing of any such committee or group;
(iv) Any person who finances or joins with another to finance the
solicitation of proxies, except persons who contribute not more than
$500 and who are not otherwise participants;
(v) Any person who lends money or furnishes credit or enters into
any other arrangements, pursuant to any contract or understanding with a
participant, for the purpose of financing or otherwise inducing the
purchase, sale, holding or voting of securities of the registrant by any
participant or other persons, in support of or in opposition to a
participant; except that such terms do not include a bank, broker or
dealer who, in the ordinary course of business, lends money or executes
orders for the purchase or sale of securities and who is not otherwise a
participant; and
(vi) Any person who solicits proxies.
(b) The terms ``participant'' and ``participant in a solicitation''
do not include:
(i) Any person or organization retained or employed by a participant
to solicit security holders and whose activities are limited to the
duties required to be performed in the course of such employment;
(ii) Any person who merely transmits proxy soliciting material or
performs other ministerial or clerical duties;
(iii) Any person employed by a participant in the capacity of
attorney, accountant, or advertising, public relations or financial
adviser, and whose activities are limited to the duties required to be
performed in the course of such employment;
(iv) Any person regularly employed as an officer or employee of the
registrant or any of its subsidiaries who is not otherwise a
participant; or
(v) Any officer or director of, or any person regularly employed by,
any other participant, if such officer, director or employee is not
otherwise a participant.
Item 5. Interest of certain Persons in Matters To Be Acted Upon--a)
Solicitations not subject to Rule 14a-12(c) (Sec. 240.14a-12(c)).
Describe briefly any substantial interest, direct or indirect, by
security holdings or otherwise, of each of the following persons in any
matter to be acted upon, other than elections to office:
(1) If the solicitation is made on behalf of the registrant, each
person who has been a director or executive officer of the registrant at
any time since the beginning of the last fiscal year.
(2) If the solicitation is made otherwise than on behalf of the
registrant, each participant in the solicitation, as defined in
paragraphs (a) (iii), (iv), (v), and (vi) of Instruction 3 to Item 4 of
this Schedule 14A.
(3) Each nominee for election as a director of the registrant.
(4) Each associate of any of the foregoing persons.
Instruction. Except in the case of a solicitation subject to this
regulation made in opposition to another solicitation subject to this
regulation, this sub-item (a) shall not apply to any interest arising
from the ownership of securities of the registrant where the security
holder receives no extra or special benefit not shared on a pro rata
basis by all other holders of the same class.
(b) Solicitation subject to Rule 14a-12(c) (Sec. 240.14a-12(c)).
With respect to any solicitation subject to Rule 14a-12(c) (Sec.
240.14a-12(c)):
(1) Describe briefly any substantial interest, direct or indirect,
by security holdings or otherwise, of each participant as defined in
paragraphs (a) (ii), (iii), (iv), (v) and (vi) of Instruction 3 to Item
4 of this Schedule 14A, in any matter to be acted upon at the meeting,
and include with respect to each participant the following information,
or a fair and accurate summary thereof:
(i) Name and business address of the participant.
(ii) The participant's present principal occupation or employment
and the name, principal business and address of any corporation or other
organization in which such employment is carried on.
(iii) State whether or not, during the past ten years, the
participant has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) and, if so, give dates,
nature of conviction, name and location of court, and penalty imposed or
other disposition of the case. A negative answer need not be included in
the proxy statement or other soliciting material.
(iv) State the amount of each class of securities of the registrant
which the participant owns beneficially, directly or indirectly.
(v) State the amount of each class of securities of the registrant
which the participant owns of record but not beneficially.
(vi) State with respect to all securities of the registrant
purchased or sold within the past two years, the dates on which they
were purchased or sold and the amount purchased or sold on each such
date.
[[Page 189]]
(vii) If any part of the purchase price or market value of any of
the shares specified in paragraph (b)(1)(vi) of this Item is represented
by funds borrowed or otherwise obtained for the purpose of acquiring or
holding such securities, so state and indicate the amount of the
indebtedness as of the latest practicable date. If such funds were
borrowed or obtained otherwise than pursuant to a margin account or bank
loan in the regular course of business of a bank, broker or dealer,
briefly describe the transaction, and state the names of the parties.
(viii) State whether or not the participant is, or was within the
past year, a party to any contract, arrangements or understandings with
any person with respect to any securities of the registrant, including,
but not limited to joint ventures, loan or option arrangements, puts or
calls, guarantees against loss or guarantees of profit, division of
losses or profits, or the giving or withholding of proxies. If so, name
the parties to such contracts, arrangements or understandings and give
the details thereof.
(ix) State the amount of securities of the registrant owned
beneficially, directly or indirectly, by each of the participant's
associates and the name and address of each such associate.
(x) State the amount of each class of securities of any parent or
subsidiary of the registrant which the participant owns beneficially,
directly or indirectly.
(xi) Furnish for the participant and associates of the participant
the information required by Item 404(a) of Regulation S-K (Sec.
229.404(a) of this chapter).
(xii) State whether or not the participant or any associates of the
participant have any arrangement or understanding with any person--
(A) with respect to any future employment by the registrant or its
affiliates; or
(B) with respect to any future transactions to which the registrant
or any of its affiliates will or may be a party.
If so, describe such arrangement or understanding and state the names of
the parties thereto.
(2) With respect to any person, other than a director or executive
officer of the registrant acting solely in that capacity, who is a party
to an arrangement or understanding pursuant to which a nominee for
election as director is proposed to be elected, describe any substantial
interest, direct or indirect, by security holdings or otherwise, that
such person has in any matter to be acted upon at the meeting, and
furnish the information called for by paragraphs (b)(1) (xi) and (xii)
of this Item.
Instruction: For purposes of this Item 5, beneficial ownership shall
be determined in accordance with Rule 13d-3 under the Act (Section
240.13d-3 of this chapter).
Item 6. Voting securities and principal holders thereof, (a) As to
each class of voting securities of the registrant entitled to be voted
at the meeting (or by written consents or authorizations if no meeting
is held), state the number of shares outstanding and the number of votes
to which each class is entitled.
(b) State the record date, if any, with respect to this
solicitation. If the right to vote or give consent is not to be
determined, in whole or in part, by reference to a record date, indicate
the criteria for the determination of security holders entitled to vote
or give consent.
(c) If action is to be taken with respect to the election of
directors and if the persons solicited have cumulative voting rights:
(1) Make a statement that they have such rights, (2) briefly describe
such rights, (3) state briefly the conditions precedent to the exercise
thereof, and (4) if discretionary authority to cumulate votes is
solicited, so indicate.
(d) Furnish the information required by Item 403 of Regulation S-K
(Sec. 229.403 of this chapter) to the extent known by the persons on
whose behalf the solicitation is made.
(e) If, to the knowledge of the persons on whose behalf the
solicitation is made, a change in control of the registrant has occurred
since the beginning of its last fiscal year, state the name of the
person(s) who acquired such control, the amount and the source of the
consideration used by such person or persons; the basis of the control,
the date and a description of the transaction(s) which resulted in the
change of control and the percentage of voting securities of the
registrant now beneficially owned directly or indirectly by the
person(s) who acquired control; and the identity of the person(s) from
whom control was assumed. If the source of all or any part of the
consideration used is a loan made in the ordinary course of business by
a bank as defined by section 3(a)(6) of the Act, the identity of such
bank shall be omitted provided a request for confidentiality has been
made pursuant to section 13(d)(1)(B) of the Act by the person(s) who
acquired control. In lieu thereof, the material shall indicate that the
identity of the bank has been so omitted and filed separately with the
Commission.
Instruction. 1. State the terms of any loans or pledges obtained by
the new control group for the purpose of acquiring control, and the
names of the lenders or pledgees.
2. Any arrangements or understandings among members of both the
former and new control groups and their associates with respect to
election of directors or other matters should be described.
Item 7. Directors and executive officers. If action is to be taken
with respect to the election of directors, furnish the following
information in tabular form to the extent practicable. If, however, the
solicitation is made
[[Page 190]]
on behalf of persons other than the registrant, the information required
need be furnished only as to nominees of the persons making the
solicitation.
(a) The information required by instruction 4 to Item 103 of
Regulation S-K (Sec. 229.103 of this chapter) with respect to directors
and executive officers.
(b) The information required by Items 401, 404 (a) and (c), and 405
of Regulation S-K (Sec. 229.401, Sec. 229.404 and Sec. 229.405 of
this chapter).
(c) The information required by Item 404(b) of Regulation S-K (Sec.
229.404 of this chapter).
(d)(1) State whether or not the registrant has standing audit,
nominating and compensation committees of the Board of Directors, or
committees performing similar functions. If the registrant has such
committees, however designated, identify each committee member, state
the number of committee meetings held by each such committee during the
last fiscal year and describe briefly the functions performed by such
committees. Such disclosure need not be provided to the extent it is
duplicative of disclosure provided in accordance with Item 401(i) of
Regulation S-K (Sec. 229.401(i) of this chapter).
(2)(i) If the registrant does not have a standing nominating
committee or committee performing similar functions, state the basis for
the view of the board of directors that it is appropriate for the
registrant not to have such a committee and identify each director who
participates in the consideration of director nominees;
(ii) Provide the following information regarding the registrant's
director nomination process:
(A) If the nominating committee has a charter, disclose whether a
current copy of the charter is available to security holders on the
registrant's Web site. If the nominating committee has a charter and a
current copy of the charter is available to security holders on the
registrant's Web site, provide the registrant's Web site address. If the
nominating committee has a charter and a current copy of the charter is
not available to security holders on the registrant's Web site, include
a copy of the charter as an appendix to the registrant's proxy statement
at least once every three fiscal years. If a current copy of the charter
is not available to security holders on the registrant's Web site, and
is not included as an appendix to the registrant's proxy statement,
identify in which of the prior fiscal years the charter was so included
in satisfaction of this requirement;
(B) If the nominating committee does not have a charter, state that
fact;
(C) If the registrant is a listed issuer (as defined in Sec.
240.10A-3) whose securities are listed on a national securities exchange
registered pursuant to section 6(a) of the Act (15 U.S.C. 78f(a)) or in
an automated inter-dealer quotation system of a national securities
association registered pursuant to section 15A(a) of the Act (15 U.S.C.
78o-3(a)) that has independence requirements for nominating committee
members, disclose whether the members of the nominating committee are
independent, as independence for nominating committee members is defined
in the listing standards applicable to the listed issuer;
(D) If the registrant is not a listed issuer (as defined in Sec.
240.10A-3), disclose whether each of the members of the nominating
committee is independent. In determining whether a member is
independent, the registrant must use a definition of independence of a
national securities exchange registered pursuant to section 6(a) of the
Act (15 U.S.C. 78f(a)) or a national securities association registered
pursuant to section 15A(a) of the Act (15 U.S.C. 78o-3(a)) that has been
approved by the Commission (as that definition may be modified or
supplemented), and state which definition it used. Whatever definition
the registrant chooses, it must apply that definition consistently to
all members of the nominating committee and use the independence
standards of the same national securities exchange or national
securities association for purposes of nominating committee disclosure
under this requirement and audit committee disclosure required under
paragraph (d)(3)(iv) of Item 7 of Schedule 14A (Sec. 240.14a-101);
(E) If the nominating committee has a policy with regard to the
consideration of any director candidates recommended by security
holders, provide a description of the material elements of that policy,
which shall include, but need not be limited to, a statement as to
whether the committee will consider director candidates recommended by
security holders;
(F) If the nominating committee does not have a policy with regard
to the consideration of any director candidates recommended by security
holders, state that fact and state the basis for the view of the board
of directors that it is appropriate for the registrant not to have such
a policy;
(G) If the nominating committee will consider candidates recommended
by security holders, describe the procedures to be followed by security
holders in submitting such recommendations;
(H) Describe any specific, minimum qualifications that the
nominating committee believes must be met by a nominating committee-
recommended nominee for a position on the registrant's board of
directors, and describe any specific qualities or skills that the
nominating committee believes are necessary for one or more of the
registrant's directors to possess;
[[Page 191]]
(I) Describe the nominating committee's process for identifying and
evaluating nominees for director, including nominees recommended by
security holders, and any differences in the manner in which the
nominating committee evaluates nominees for director based on whether
the nominee is recommended by a security holder;
(J) With regard to each nominee approved by the nominating committee
for inclusion on the registrant's proxy card (other than nominees who
are executive officers or who are directors standing for re-election),
state which one or more of the following categories of persons or
entities recommended that nominee: security holder, non-management
director, chief executive officer, other executive officer, third-party
search firm, or other, specified source. With regard to each such
nominee approved by a nominating committee of an investment company,
state which one or more of the following additional categories of
persons or entities recommended that nominee: security holder, director,
chief executive officer, other executive officer, or employee of the
investment company's investment adviser, principal underwriter, or any
affiliated person of the investment adviser or principal underwriter;
(K) If the registrant pays a fee to any third party or parties to
identify or evaluate or assist in identifying or evaluating potential
nominees, disclose the function performed by each such third party; and
(L) If the registrant's nominating committee received, by a date not
later than the 120th calendar day before the date of the registrant's
proxy statement released to security holders in connection with the
previous year's annual meeting, a recommended nominee from a security
holder that beneficially owned more than 5% of the registrant's voting
common stock for at least one year as of the date the recommendation was
made, or from a group of security holders that beneficially owned, in
the aggregate, more than 5% of the registrant's voting common stock,
with each of the securities used to calculate that ownership held for at
least one year as of the date the recommendation was made, identify the
candidate and the security holder or security holder group that
recommended the candidate and disclose whether the nominating committee
chose to nominate the candidate, provided, however, that no such
identification or disclosure is required without the written consent of
both the security holder or security holder group and the candidate to
be so identified.
Instructions to paragraph (d)(2)(ii)(L):
1. For purposes of Item 7(d)(2)(ii)(L), the percentage of securities
held by a nominating security holder may be determined using information
set forth in the registrant's most recent quarterly or annual report,
and any current report subsequent thereto, filed with the Commission
pursuant to this Act (or, in the case of a registrant that is an
investment company registered under the Investment Company Act of 1940,
the registrant's most recent report on Form N-CSR (Sec. Sec. 249.331
and 274.128)), unless the party relying on such report knows or has
reason to believe that the information contained therein is inaccurate.
2. For purposes of the registrant's obligation to provide the
disclosure specified in Item 7(d)(2)(ii)(L), where the date of the
annual meeting has been changed by more than 30 days from the date of
the previous year's meeting, the obligation under that Item will arise
where the registrant receives the security holder recommendation a
reasonable time before the registrant begins to print and mail its proxy
materials.
3. For purposes of Item 7(d)(2)(ii)(L), the percentage of securities
held by a recommending security holder, as well as the holding period of
those securities, may be determined by the registrant if the security
holder is the registered holder of the securities. If the security
holder is not the registered owner of the securities, he or she can
submit one of the following to the registrant to evidence the required
ownership percentage and holding period:
A. A written statement from the ``record'' holder of the securities
(usually a broker or bank) verifying that, at the time the security
holder made the recommendation, he or she had held the required
securities for at least one year; or
B. If the security holder has filed a Schedule 13D (Sec. 240.13d-
101), Schedule 13G (Sec. 240.13d-102), Form 3 (Sec. 249.103), Form 4
(Sec. 249.104), and/or Form 5 (Sec. 249.105), or amendments to those
documents or updated forms, reflecting ownership of the securities as of
or before the date of the recommendation, a copy of the schedule and/or
form, and any subsequent amendments reporting a change in ownership
level, as well as a written statement that the security holder
continuously held the securities for the one-year period as of the date
of the recommendation.
4. For purposes of the registrant's obligation to provide the
disclosure specified in Item 7(d)(2)(ii)(L), the security holder or
group must have provided to the registrant, at the time of the
recommendation, the written consent of all parties to be identified and,
where the security holder or group members are not registered holders,
proof that the security holder or group satisfied the required ownership
percentage and holding period as of the date of the recommendation.
Instruction to paragraph (d)(2)(ii): For purposes of Item
7(d)(2)(ii), the term ``nominating committee'' refers not only to
nominating committees and committees performing similar functions, but
also to groups
[[Page 192]]
of directors fulfilling the role of a nominating committee, including
the entire board of directors.
(3) If the registrant has an audit committee:
(i) Provide the information required by Item 306 of Regulation S-K
(17 CFR 229.306).
(ii) State whether the registrant's Board of Directors has adopted a
written charter for the audit committee.
(iii) Include a copy of the written charter, if any, as an appendix
to the registrant's proxy statement, unless a copy has been included as
an appendix to the registrant's proxy statement within the registrant's
past three fiscal years.
(iv)(A) If the registrant is a listed issuer, as defined in Sec.
240.10A-3:
(1) Disclose whether the members of the audit committee are
independent, as independence for audit committee members is defined in
the listing standards applicable to the listed issuer. If the registrant
does not have a separately designated audit committee, or committee
performing similar functions, the registrant must provide the disclosure
with respect to all members of its board of directors.
(2) If the listed issuer's board of directors determines, in
accordance with the listing standards applicable to the listed issuer,
to appoint a director to the audit committee who is not independent
(apart from the requirements in Sec. 240.10A-3) because of exceptional
or limited or similar circumstances, disclose the nature of the
relationship that makes that individual not independent and the reasons
for the board of directors' determination.
(B) If the registrant, including a small business issuer, is not a
listed issuer, disclose whether the registrant has an audit committee
established in accordance with section 3(a)(58)(A) of the Act (15 U.S.C.
78c(a)(58)(A)) and, if so, whether the members of the committee are
independent. In determining whether a member is independent, the
registrant must use a definition for audit committee member independence
of a national securities exchange registered pursuant to section 6(a) of
the Act (15 U.S.C. 78f(a)) or a national securities association
registered pursuant to section 15A(a) of the Act (15 U.S.C. 78o-3(a))
that has been approved by the Commission (as such definition may be
modified or supplemented), and state which definition was used.
Whichever definition is chosen must be applied consistently to all
members of the audit committee.
(v) The information required by paragraph (d)(3) of this Item shall
not be deemed to be ``soliciting material,'' or to be ``filed'' with the
Commission or subject to Regulation 14A or 14C (17 CFR 240.14a-1 et seq.
or 240.14c-1 et seq.), other than as provided in this Item, or to the
liabilities of section 18 of the Exchange Act (15 U.S.C. 78r), except to
the extent that the registrant specifically requests that the
information be treated as soliciting material or specifically
incorporates it by reference into a document filed under the Securities
Act or the Exchange Act. Such information will not be deemed to be
incorporated by reference into any filing under the Securities Act or
the Exchange Act, except to the extent that the registrant specifically
incorporates it by reference.
(vi) The disclosure required by this paragraph (d)(3) need only be
provided one time during any fiscal year.
(vii) Investment companies registered under the Investment Company
Act of 1940 (15 U.S.C. 80a-1 et seq.), other than closed-end investment
companies, need not provide the information required by this paragraph
(d)(3).
(e) In lieu of paragraphs (a) through (d)(1) and (d)(2)(ii)(D) of
this Item, investment companies registered under the Investment Company
Act of 1940 (15 U.S.C. 80a) must furnish the information required by
Item 22(b) of this Schedule 14A.
(f) State the total number of meetings of the board of directors
(including regularly scheduled and special meetings) which were held
during the last full fiscal year. Name each incumbent director who
during the last full fiscal year attended fewer than 75 percent of the
aggregate of (1) the total number of meetings of the board of directors
(held during the period for which he has been a director) and (2) the
total number of meetings held by all committees of the board on which he
served (during the periods that he served).
(g) If a director has resigned or declined to stand for re-election
to the board of directors since the date of the last annual meeting of
security holders because of a disagreement with the registrant on any
matter relating to the registrant's operations, policies or practices,
and if the director has furnished the registrant with a letter
describing such disagreement and requesting that the matter be
disclosed, the registrant shall state the date of resignation or
declination to stand for re-election and summarize the director's
description of the disagreement.
If the registrant believes that the description provided by the director
is incorrect or incomplete, it may include a brief statement presenting
its view of the disagreement.
(h)(1) State whether or not the registrant's board of directors
provides a process for security holders to send communications to the
board of directors and, if the registrant does not have such a process
for security holders to send communications to the board of directors,
state the basis for the view of the board of directors that it is
appropriate for the registrant not to have such a process;
(2) If the registrant has a process for security holders to send
communications to the board of directors:
[[Page 193]]
(i) Describe the manner in which security holders can send
communications to the board and, if applicable, to specified individual
directors; and
(ii) If all security holder communications are not sent directly to
board members, describe the registrant's process for determining which
communications will be relayed to board members; and
Instruction to paragraph (h)(2)(ii): For purposes of the disclosure
required by this paragraph, a registrant's process for collecting and
organizing security holder communications, as well as similar or related
activities, need not be disclosed provided that the registrant's process
is approved by a majority of the independent directors or, in the case
of a registrant that is an investment company, a majority of the
directors who are not ``interested persons'' of the investment company
as defined in section 2(a)(19) of the Investment Company Act of 1940 (15
U.S.C. 80a-2(a)(19)).
(3) Describe the registrant's policy, if any, with regard to board
members' attendance at annual meetings and state the number of board
members who attended the prior year's annual meeting.
Instruction to paragraphs (h)(2) and (h)(3): In lieu of providing
the information required by paragraphs (h)(2) and (h)(3) in the proxy
statement, the registrant may instead provide the registrant's Website
address where such information appears.
Instructions to paragraph (h):
1. For purposes of this paragraph, communications from an officer or
director of the registrant will not be viewed as ``security holder
communications.'' Communications from an employee or agent of the
registrant will be viewed as ``security holder communications'' for
purposes of this paragraph only if those communications are made solely
in such employee's or agent's capacity as a security holder.
2. For purposes of this paragraph, security holder proposals
submitted pursuant to Sec. 240.14a-8, and communications made in
connection with such proposals, will not be viewed as ``security holder
communications.''
Item 8. Compensation of directors and executive officers. Furnish
the information required by Item 402 (Sec. 229.402 of this chapter) of
Regulation S-K if action is to be taken with regard to:
(a) The election of directors;
(b) Any bonus, profit sharing or other compensation plan, contract
or arrangement in which any director, nominee for election as a
director, or executive officer of the registrant will participate;
(c) Any pension or retirement plan in which any such person will
participate; or
(d) The granting or extension to any such person of any options,
warrants or rights to purchase any securities, other than warrants or
rights issued to security holders as such, on a pro rata basis.
However, if the solicitation is made on behalf of persons other than
the registrant, the information required need be furnished only as to
nominees of the persons making the solicitation and associates of such
nominees. In the case of investment companies registered under the
Investment Company Act of 1940 and registrants that have elected to be
regulated as business development companies, furnish the information
required by Item 22(b)(13) of this Schedule.
Instruction. If an otherwise reportable compensation plan became
subject to such requirements because of an acquisition or merger and,
within one year of the acquisition or merger, such plan was terminated
for purposes of prospective eligibility, the registrant may furnish a
description of its obligation to the designated individuals pursuant to
the compensation plan. Such description may be furnished in lieu of a
description of the compensation plan in the proxy statement.
Item 9. Independent public accountants. If the solicitation is made
on behalf of the registrant and relates to: (1) The annual (or special
meeting in lieu of annual) meeting of security holders at which
directors are to be elected, or a solicitation of consents or
authorizations in lieu of such meeting or (2) the election, approval or
ratification of the registrant's accountant, furnish the following
information describing the registrant's relationship with its
independent public accountant:
(a) The name of the principal accountant selected or being
recommended to security holders for election, approval or ratification
for the current year. If no accountant has been selected or recommended,
so state and briefly describe the reasons therefor.
(b) The name of the principal accountant for the fiscal year most
recently completed if different from the accountant selected or
recommended for the current year or if no accountant has yet been
selected or recommended for the current year.
(c) The proxy statement shall indicate: (1) Whether or not
representatives of the principal accountant for the current year and for
the most recently completed fiscal year are expected to be present at
the security holders' meeting, (2) whether or not they will have the
opportunity to make a statement if they desire to do so, and (3) whether
or not such representatives are expected to be available to respond to
appropriate questions.
(d) If during the registrant's two most recent fiscal years or any
subsequent interim period, (1) an independent accountant who was
previously engaged as the principal accountant to audit the registrant's
financial statements, or an independent accountant on
[[Page 194]]
whom the principal accountant expressed reliance in its report regarding
a significant subsidiary, has resigned (or indicated it has declined to
stand for re-election after the completion of the current audit) or was
dismissed, or (2) a new independent accountant has been engaged as
either the principal accountant to audit the registrant's financial
statements or as an independent accountant on whom the principal
accountant has expressed or is expected to express reliance in its
report regarding a significant subsidiary, then, notwithstanding any
previous disclosure, provide the information required by Item 304(a) of
Regulation S-K (Sec. 229.304 of this chapter).
(e)(1) Disclose, under the caption Audit Fees, the aggregate fees
billed for each of the last two fiscal years for professional services
rendered by the principal accountant for the audit of the registrant's
annual financial statements and review of financial statements included
in the registrant's Form 10-Q (17 CFR 249.308a) or 10-QSB (17 CFR
249.308b) or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for
those fiscal years.
(2) Disclose, under the caption Audit-Related Fees, the aggregate
fees billed in each of the last two fiscal years for assurance and
related services by the principal accountant that are reasonably related
to the performance of the audit or review of the registrant's financial
statements and are not reported under paragraph (e)(1) of this section.
Registrants shall describe the nature of the services comprising the
fees disclosed under this category.
(3) Disclose, under the caption Tax Fees, the aggregate fees billed
in each of the last two fiscal years for professional services rendered
by the principal accountant for tax compliance, tax advice, and tax
planning. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
(4) Disclose, under the caption All Other Fees, the aggregate fees
billed in each of the last two fiscal years for products and services
provided by the principal accountant, other than the services reported
in paragraphs (e)(1) through (e)(3) of this section. Registrants shall
describe the nature of the services comprising the fees disclosed under
this category.
(5)(i) Disclose the audit committee's pre-approval policies and
procedures described in 17 CFR 210.2-01(c)(7)(i).
(ii) Disclose the percentage of services described in each of
paragraphs (e)(2) through (e)(4) of this section that were approved by
the audit committee pursuant to 17 CFR 210.2-01(c)(7)(i)(C).
(6) If greater than 50 percent, disclose the percentage of hours
expended on the principal accountant's engagement to audit the
registrant's financial statements for the most recent fiscal year that
were attributed to work performed by persons other than the principal
accountant's full-time, permanent employees.
(7) If the registrant is an investment company, disclose the
aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and to the registrant's investment
adviser (not including any subadviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the
registrant for each of the last two fiscal years of the registrant.
(8) If the registrant is an investment company, disclose whether the
audit committee of the board of directors has considered whether the
provision of non-audit services that were rendered to the registrant's
investment adviser (not including any subadviser whose role is primarily
portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to 17 CFR
210.2-01(c)(7)(ii) is compatible with maintaining the principal
accountant's independence.
Instruction to Item 9(e).
For purposes of Item 9(e)(2), (3), and (4), registrants that are
investment companies must disclose fees billed for services rendered to
the registrant and separately, disclose fees required to be approved by
the investment company registrant's audit committee pursuant to 17 CFR
210.2-01(c)(7)(ii). Registered investment companies must also disclose
the fee percentages as required by item 9(e)(5)(ii) for the registrant
and separately, disclose the fee percentages as required by item
9(e)(5)(ii) for the fees required to be approved by the investment
company registrant's audit committee pursuant to 17 CFR 210.2-
01(c)(7)(ii).
Item 10. Compensation Plans. If action is to be taken with respect
to any plan pursuant to which cash or noncash compensation may be paid
or distributed, furnish the following information:
(a) Plans subject to security holder action. (1) Describe briefly
the material features of the plan being acted upon, identify each class
of persons who will be eligible to participate therein, indicate the
approximate number of persons in each such class, and state the basis of
such participation.
(2)(i) In the tabular format specified below, disclose the benefits
or amounts that will be received by or allocated to each of the
following under the plan being acted upon, if such benefits or amounts
are determinable:
[[Page 195]]
New Plan Benefits
------------------------------------------------------------------------
Plan name
-------------------------------------------------------------------------
Name and position Dollar value ($) Number of units
------------------------------------------------------------------------
CEO................................
A..................................
B..................................
C..................................
D..................................
Executive Group....................
Non-Executive Director Group.......
Non-Executive Officer Employee
Group.
------------------------------------------------------------------------
(ii) The table required by paragraph (a)(2)(i) of this Item shall
provide information as to the following persons:
(A) Each person (stating name and position) specified in paragraph
(a)(3) of Item 402 of Regulation S-K (Sec. 229.402(a)(3) of this
chapter);
Instruction: In the case of investment companies registered under
the Investment Company Act of 1940, furnish the information for
Compensated Persons as defined in Item 22(b)(13) of this Schedule in
lieu of the persons specified in paragraph (a)(3) of Item 402 of
Regulation S-K (Sec. 229.402(a)(3) of this chapter).
(B) All current executive officers as a group;
(C) All current directors who are not executive officers as a group;
and
(D) All employees, including all current officers who are not
executive officers, as a group.
Instruction to New Plan Benefits Table
Additional columns should be added for each plan with respect to
which security holder action is to be taken.
(iii) If the benefits or amounts specified in paragraph (a)(2)(i) of
this item are not determinable, state the benefits or amounts which
would have been received by or allocated to each of the following for
the last completed fiscal year if the plan had been in effect, if such
benefits or amounts may be determined, in the table specified in
paragraph (a)(2)(i) of this Item:
(A) Each person (stating name and position) specified in paragraph
(a)(3) of Item 402 of Regulation S-K (Sec. 229.402(a)(3) of this
chapter);
(B) All current executive officers as a group;
(C) All current directors who are not executive officers as a group;
and
(D) All employees, including all current officers who are not
executive officers, as a group.
(3) If the plan to be acted upon can be amended, otherwise than by a
vote of security holders, to increase the cost thereof to the registrant
or to alter the allocation of the benefits as between the persons and
groups specified in paragraph (a)(2) of this item, state the nature of
the amendments which can be so made.
(b)(1) Additional information regarding specified plans subject to
security holder action. With respect to any pension or retirement plan
submitted for security holder action, state:
(i) The approximate total amount necessary to fund the plan with
respect to past services, the period over which such amount is to be
paid and the estimated annual payments necessary to pay the total amount
over such period; and
(ii) The estimated annual payment to be made with respect to current
services. In the case of a pension or retirement plan, information
called for by paragraph (a)(2) of this Item may be furnished in the
format specified by paragraph (f)(1) of Item 402 of Regulation S-K
(Sec. 229.402(f)(1) of this chapter).
Instruction. In the case of investment companies registered under
the Investment Company Act of 1940, refer to instruction 4 in Item
22(b)(13)(i) of this Schedule in lieu of paragraph (f)(1) of Item 402 of
Regulation S-K (Sec. 229.402(f)(1) of this chapter).
(2)(i) With respect to any specific grant of or any plan containing
options, warrants or rights submitted for security holder action, state:
(A) The title and amount of securities underlying such options,
warrants or rights;
(B) The prices, expiration dates and other material conditions upon
which the options, warrants or rights may be exercised;
(C) The consideration received or to be received by the registrant
or subsidiary for the granting or extension of the options, warrants or
rights;
(D) The market value of the securities underlying the options,
warrants, or rights as of the latest practicable date; and
(E) In the case of options, the federal income tax consequences of
the issuance and exercise of such options to the recipient and the
registrant; and
(ii) State separately the amount of such options received or to be
received by the following persons if such benefits or amounts are
determinable:
(A) Each person (stating name and position) specified in paragraph
(a)(3) of Item 402 of Regulation S-K (Sec. 229.402(a)(3) of this
chapter);
(B) All current executive officers as a group;
(C) All current directors who are not executive officers as a group;
(D) Each nominee for election as a director;
(E) Each associate of any of such directors, executive officers or
nominees;
(F) Each other person who received or is to receive 5 percent of
such options, warrants or rights; and
[[Page 196]]
(G) All employees, including all current officers who are not
executive officers, as a group.
(c) Information regarding plans and other arrangements not subject
to security holder action. Furnish the information required by Item
201(d) of Regulation S-K (Sec. 229.201(d) of this chapter).
Instructions to paragraph (c).
1. If action is to be taken as described in paragraph (a) of this
Item with respect to the approval of a new compensation plan under which
equity securities of the registrant are authorized for issuance,
information about the plan shall be disclosed as required under
paragraphs (a) and (b) of this Item and shall not be included in the
disclosure required by Item 201(d) of Regulation S-K (Sec. 229.201(d)
of this chapter). If action is to be taken as described in paragraph (a)
of this Item with respect to the amendment or modification of an
existing plan under which equity securities of the registrant are
authorized for issuance, the registrant shall include information about
securities previously authorized for issuance under the plan (including
any outstanding options, warrants and rights previously granted pursuant
to the plan and any securities remaining available for future issuance
under the plan) in the disclosure required by Item 201(d) of Regulation
S-K (Sec. 229.201(d) of this chapter). Any additional securities that
are the subject of the amendments or modification of the existing plan
shall be disclosed as required under paragraphs (a) and (b) of this Item
and shall not be included in the Item 201(d) disclosure.
Instructions
1. The term ``plan'' as used in this Item means any plan as defined
in paragraph (a)(7)(ii) of Item 402 of Regulation S-K (Sec.
229.402(a)(7)(ii) of this chapter).
2. If action is to be taken with respect to a material amendment or
modification of an existing plan, the item shall be answered with
respect to the plan as proposed to be amended or modified and shall
indicate any material differences from the existing plan.
3. If the plan to be acted upon is set forth in a written document,
three copies thereof shall be filed with the Commission at the time
copies of the proxy statement and form of proxy are first filed pursuant
to paragraph (a) or (b) of Sec. 240.14a-6. Electronic filers shall file
with the Commission a copy of such written plan document in electronic
format as an appendix to the proxy statement. It need not be provided to
security holders unless it is a part of the proxy statement.
4. Paragraph (b)(2)(ii) does not apply to warrants or rights to be
issued to security holders as such on a pro rata basis.
5. The Commission shall be informed, as supplemental information,
when the proxy statement is first filed, as to when the options,
warrants or rights and the shares called for thereby will be registered
under the Securities Act or, if such registration is not contemplated,
the section of the Securities Act or rule of the Commission under which
exemption from such registration is claimed and the facts relied upon to
make the exemption available.
Item 11. Authorization or issuance of securities otherwise than for
exchange. If action is to be taken with respect to the authorization or
issuance of any securities otherwise than for exchange for outstanding
securities of the registrant, furnish the following information:
(a) State the title and amount of securities to be authorized or
issued.
(b) Furnish the information required by Item 202 of Regulation S-K
(Sec. 229.202 of this chapter). If the terms of the securities cannot
be stated or estimated with respect to any or all of the securities to
be authorized, because no offering thereof is contemplated in the
proximate future, and if no further authorization by security holders
for the issuance thereof is to be obtained, it should be stated that the
terms of the securities to be authorized, including dividend or interest
rates, conversion prices, voting rights, redemption prices, maturity
dates, and similar matters will be determined by the board of directors.
If the securities are additional shares of common stock of a class
outstanding, the description may be omitted except for a statement of
the preemptive rights, if any. Where the statutory provisions with
respect to preemptive rights are so indefinite or complex that they
cannot be stated in summarized form, it will suffice to make a statement
in the form of an opinion of counsel as to the existence and extent of
such rights.
(c) Describe briefly the transaction in which the securities are to
be issued including a statement as to (1) the nature and approximate
amount of consideration received or to be received by the registrant and
(2) the approximate amount devoted to each purpose so far as
determinable for which the net proceeds have been or are to be used. If
it is impracticable to describe the transaction in which the securities
are to be issued, state the reason, indicate the purpose of the
authorization of the securities, and state whether further authorization
for the issuance of the securities by a vote of security holders will be
solicited prior to such issuance.
(d) If the securities are to be issued otherwise than in a public
offering for cash, state the reasons for the proposed authorization or
issuance and the general effect thereof upon the rights of existing
security holders.
(e) Furnish the information required by Item 13(a) of this schedule.
Item 12. Modification or exchange of securities. If action is to be
taken with respect to
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the modification of any class of securities of the registrant, or the
issuance or authorization for issuance of securities of the registrant
in exchange for outstanding securities of the registrant furnish the
following information:
(a) If outstanding securities are to be modified, state the title
and amount thereof. If securities are to be issued in exchange for
outstanding securities, state the title and amount of securities to be
so issued, the title and amount of outstanding securities to be
exchanged therefor and the basis of the exchange.
(b) Describe any material differences between the outstanding
securities and the modified or new securities in respect of any of the
matters concerning which information would be required in the
description of the securities in Item 202 of Regulation S-K (Sec.
229.202 of this chapter).
(c) State the reasons for the proposed modification or exchange and
the general effect thereof upon the rights of existing security holders.
(d) Furnish a brief statement as to arrears in dividends or as to
defaults in principal or interest in respect to the outstanding
securities which are to be modified or exchanged and such other
information as may be appropriate in the particular case to disclose
adequately the nature and effect of the proposed action.
(e) Outline briefly any other material features of the proposed
modification or exchange. If the plan of proposed action is set forth in
a written document, file copies thereof with the Commission in
accordance with Sec. 240.14a-6.
(f) Furnish the information required by Item 13(a) of this Schedule.
Instruction. If the existing security is presently listed and
registered on a national securities exchange, state whether the
registrant intends to apply for listing and registration of the new or
reclassified security on such exchange or any other exchange. If the
registrant does not intend to make such application, state the effect of
the termination of such listing and registration.
Item 13. Financial and other information. (See Notes D and E at the
beginning of this Schedule.)
(a) Information required. If action is to be taken with respect to
any matter specified in Item 11 or 12, furnish the following
information:
(1) Financial statements meeting the requirements of Regulation S-X,
including financial information required by Rule 3-05 and Article 11 of
Regulation S-X with respect to transactions other than that pursuant to
which action is to be taken as described in this proxy statement;
(2) Item 302 of Regulation S-K, supplementary financial information;
(3) Item 303 of Regulation S-K, management's discussion and analysis
of financial condition and results of operations;
(4) Item 304 of Regulation S-K, changes in and disagreements with
accountants on accounting and financial disclosure;
(5) Item 305 of Regulation S-K, quantitative and qualitative
disclosures about market risk; and
(6) A statement as to whether or not representatives of the
principal accountants for the current year and for the most recently
completed fiscal year:
(i) Are expected to be present at the security holders' meeting;
(ii) Will have the opportunity to make a statement if they desire to
do so; and
(iii) Are expected to be available to respond to appropriate
questions.
(b) Incorporation by reference. The information required pursuant to
paragraph (a) of this Item may be incorporated by reference into the
proxy statement as follows:
(1) S-3 registrants. If the registrant meets the requirements of
Form S-3( see Note E to this Schedule), it may incorporate by reference
to previously-filed documents any of the information required by
paragraph (a) of this Item, provided that the requirements of paragraph
(c) are met. Where the registrant meets the requirements of Form S-3 and
has elected to furnish the required information by incorporation by
reference, the registrant may elect to update the information so
incorporated by reference to information in subsequently-filed
documents.
(2) All registrants. The registrant may incorporate by reference any
of the information required by paragraph (a) of this Item, provided that
the information is contained in an annual report to security holders or
a previously-filed statement or report, such report or statement is
delivered to security holders with the proxy statement and the
requirements of paragraph (c) are met.
(c) Certain conditions applicable to incorporation by reference.
Registrants eligible to incorporate by reference into the proxy
statement the information required by paragraph (a) of this Item in the
manner specified by paragraphs (b)(1) and (b)(2) may do so only if:
(1) The information is not required to be included in the proxy
statement pursuant to the requirement of another Item;
(2) The proxy statement identifies on the last page(s) the
information incorporated by reference; and
(3) The material incorporated by reference substantially meets the
requirements of this Item or the appropriate portions of this Item.
Instructions to Item 13.
1. Notwithstanding the provisions of this Item, any or all of the
information required by paragraph (a) of this Item not material for the
exercise of prudent judgment in regard to the matter to be acted upon
may be
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omitted. In the usual case the information is deemed material to the
exercise of prudent judgment where the matter to be acted upon is the
authorization or issuance of a material amount of senior securities, but
the information is not deemed material where the matter to be acted upon
is the authorization or issuance of common stock, otherwise than in an
exchange, merger, consolidation, acquisition or similar transaction, the
authorization of preferred stock without present intent to issue or the
authorization of preferred stock for issuance for cash in an amount
constituting fair value.
2. In order to facilitate compliance with Rule 2-02(a) of Regulation
S-X, one copy of the definitive proxy statement filed with the
Commission shall include a manually signed copy of the accountant's
report. If the financial statements are incorporated by reference, a
manually signed copy of the accountant's report shall be filed with the
definitive proxy statement.
3. Notwithstanding the provisions of Regulation S-X, no schedules
other than those prepared in accordance with Rules 12-15, 12-28 and 12-
29 (or, for management investment companies, Rules 12-12 through 12-14)
of that regulation need be furnished in the proxy statement.
4. Unless registered on a national securities exchange or otherwise
required to furnish such information, registered investment companies
need not furnish the information required by paragraph (a)(2) or (3) of
this Item.
5. If the registrant submits preliminary proxy material
incorporating by reference financial statements required by this Item,
the registrant should furnish a draft of the financial statements if the
document from which they are incorporated has not been filed with or
furnished to the Commission.
6. A registered investment company need not comply with items
(a)(2), (a)(3), and (a)(5) of this Item 13.
Item 14. Mergers, consolidations, acquisitions and similar matters.
(See Notes A and D at the beginning of this Schedule)
Instructions to Item 14:
1. In transactions in which the consideration offered to security
holders consists wholly or in part of securities registered under the
Securities Act of 1933, furnish the information required by Form S-4
(Sec. 239.25 of this chapter), Form F-4 (Sec. 239.34 of this chapter),
or Form N-14 (Sec. 239.23 of this chapter), as applicable, instead of
this Item. Only a Form S-4, Form F-4, or Form N-14 must be filed in
accordance with Sec. 240.14a-6(j).
2. (a) In transactions in which the consideration offered to
security holders consists wholly of cash, the information required by
paragraph (c)(1) of this Item for the acquiring company need not be
provided unless the information is material to an informed voting
decision (e.g., the security holders of the target company are voting
and financing is not assured).
(b) Additionally, if only the security holders of the target company
are voting:
i. The financial information in paragraphs (b)(8)--(11) of this Item
for the acquiring company and the target need not be provided; and
ii. The information in paragraph (c)(2) of this Item for the target
company need not be provided.
If, however, the transaction is a going-private transaction (as
defined by Sec. 240.13e-3), then the information required by paragraph
(c)(2) of this Item must be provided and to the extent that the going-
private rules require the information specified in paragraph (b)(8)--
(b)(11) of this Item, that information must be provided as well.
3. In transactions in which the consideration offered to security
holders consists wholly of securities exempt from registration under the
Securities Act of 1933 or a combination of exempt securities and cash,
information about the acquiring company required by paragraph (c)(1) of
this Item need not be provided if only the security holders of the
acquiring company are voting, unless the information is material to an
informed voting decision. If only the security holders of the target
company are voting, information about the target company in paragraph
(c)(2) of this Item need not be provided. However, the information
required by paragraph (c)(2) of this Item must be provided if the
transaction is a going-private (as defined by Sec. 240.13e-3) or roll-
up (as described by Item 901 of Regulation S-K (Sec. 229.901 of this
chapter)) transaction.
4. The information required by paragraphs (b)(8)--(11) and (c) need
not be provided if the plan being voted on involves only the acquiring
company and one or more of its totally held subsidiaries and does not
involve a liquidation or a spin off.
5. To facilitate compliance with Rule 2-02(a) of Regulation S-X
(Sec. 210.2-02(a) of this chapter) (technical requirements relating to
accountants' reports), one copy of the definitive proxy statement filed
with the Commission must include a signed copy of the accountant's
report. If the financial statements are incorporated by reference, a
signed copy of the accountant's report must be filed with the definitive
proxy statement. Signatures may be typed if the document is filed
electronically on EDGAR. See Rule 302 of Regulation S-T (Sec. 232.302
of this chapter).
6. Notwithstanding the provisions of Regulation S-X, no schedules
other than those prepared in accordance with Sec. 210.12-15, Sec.
210.12-28 and Sec. 210.12-29 of this chapter (or, for management
investment companies, Sec. Sec. 210.12-12 through 210.12-14 of this
chapter) of that regulation need be furnished in the proxy statement.
[[Page 199]]
7. If the preliminary proxy material incorporates by reference
financial statements required by this Item, a draft of the financial
statements must be furnished to the Commission staff upon request if the
document from which they are incorporated has not been filed with or
furnished to the Commission.
(a) Applicability. If action is to be taken with respect to any of
the following transactions, provide the information required by this
Item:
(1) A merger or consolidation;
(2) An acquisition of securities of another person;
(3) An acquisition of any other going business or the assets of a
going business;
(4) A sale or other transfer of all or any substantial part of
assets; or
(5) A liquidation or dissolution.
(b) Transaction information. Provide the following information for
each of the parties to the transaction unless otherwise specified:
(1) Summary term sheet. The information required by Item 1001 of
Regulation M-A (Sec. 229.1001 of this chapter).
(2) Contact information. The name, complete mailing address and
telephone number of the principal executive offices.
(3) Business conducted. A brief description of the general nature of
the business conducted.
(4) Terms of the transaction. The information required by Item
1004(a)(2) of Regulation M-A (Sec. 229.1004 of this chapter).
(5) Regulatory approvals. A statement as to whether any federal or
state regulatory requirements must be complied with or approval must be
obtained in connection with the transaction and, if so, the status of
the compliance or approval.
(6) Reports, opinions, appraisals. If a report, opinion or appraisal
materially relating to the transaction has been received from an outside
party, and is referred to in the proxy statement, furnish the
information required by Item 1015(b) of Regulation M-A (Sec. 229.1015
of this chapter).
(7) Past contacts, transactions or negotiations. The information
required by Items 1005(b) and 1011(a)(1) of Regulation M-A (Sec.
229.1005 of this chapter and Sec. 229.1011 of this chapter), for the
parties to the transaction and their affiliates during the periods for
which financial statements are presented or incorporated by reference
under this Item.
(8) Selected financial data. The selected financial data required by
Item 301 of Regulation S-K (Sec. 229.301 of this chapter).
(9) Pro forma selected financial data. If material, the information
required by Item 301 of Regulation S-K (Sec. 229.301 of this chapter)
for the acquiring company, showing the pro forma effect of the
transaction.
(10) Pro forma information. In a table designed to facilitate
comparison, historical and pro forma per share data of the acquiring
company and historical and equivalent pro forma per share data of the
target company for the following Items:
(i) Book value per share as of the date financial data is presented
pursuant to Item 301 of Regulation S-K (Sec. 229.301 of this chapter);
(ii) Cash dividends declared per share for the periods for which
financial data is presented pursuant to Item 301 of Regulation S-K
(Sec. 229.301 of this chapter); and
(iii) Income (loss) per share from continuing operations for the
periods for which financial data is presented pursuant to Item 301 of
Regulation S-K (Sec. 229.301 of this chapter).
Instructions to paragraphs (b)(8), (b)(9) and (b)(10):
1. For a business combination accounted for as a purchase, present
the financial information required by paragraphs (b)(9) and (b)(10) only
for the most recent fiscal year and interim period. For a business
combination accounted for as a pooling, present the financial
information required by paragraphs (b)(9) and (b)(10) (except for
information with regard to book value) for the most recent three fiscal
years and interim period. For purposes of these paragraphs, book value
information need only be provided for the most recent balance sheet
date.
2. Calculate the equivalent pro forma per share amounts for one
share of the company being acquired by multiplying the exchange ratio
times each of:
(i) The pro forma income (loss) per share before non-recurring
charges or credits directly attributable to the transaction;
(ii) The pro forma book value per share; and
(iii) The pro forma dividends per share of the acquiring company.
3. Unless registered on a national securities exchange or otherwise
required to furnish such information, registered investment companies
need not furnish the information required by paragraphs (b)(8) and
(b)(9) of this Item.
(11) Financial information. If material, financial information
required by Article 11 of Regulation S-X (Sec. Sec. 210.10-01 through
229.11-03 of this chapter) with respect to this transaction.
Instructions to paragraph (b)(11):
1. Present any Article 11 information required with respect to
transactions other than those being voted upon (where not incorporated
by reference) together with the pro forma information relating to the
transaction being voted upon. In presenting this information, you must
clearly distinguish between the transaction being voted upon and any
other transaction.
2. If current pro forma financial information with respect to all
other transactions is incorporated by reference, you need only
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present the pro forma effect of this transaction.
(c) Information about the parties to the transaction--(1) Acquiring
company. Furnish the information required by Part B (Registrant
Information) of Form S-4 (Sec. 239.25 of this chapter) or Form F-4
(Sec. 239.34 of this chapter), as applicable, for the acquiring
company. However, financial statements need only be presented for the
latest two fiscal years and interim periods.
(2) Acquired company. Furnish the information required by Part C
(Information with Respect to the Company Being Acquired) of Form S-4
(Sec. 239.25 of this chapter) or Form F-4 (Sec. 239.34 of this
chapter), as applicable.
(d) Information about parties to the transaction: registered
investment companies and business development companies. If the
acquiring company or the acquired company is an investment company
registered under the Investment Company Act of 1940 or a business
development company as defined by Section 2(a)(48) of the Investment
Company Act of 1940, provide the following information for that company
instead of the information specified by paragraph (c) of this Item:
(1) Information required by Item 101 of Regulation S-K (Sec.
229.101 of this chapter), description of business;
(2) Information required by Item 102 of Regulation S-K (Sec.
229.102 of this chapter), description of property;
(3) Information required by Item 103 of Regulation S-K (Sec.
229.103 of this chapter), legal proceedings;
(4) Information required by Item 201(a), (b) and (c) of Regulation
S-K (Sec. 229.201(a), (b) and (c) of this chapter), market price of and
dividends on the registrant's common equity and related stockholder
matters;
(5) Financial statements meeting the requirements of Regulation S-X,
including financial information required by Rule 3-05 and Article 11 of
Regulation S-X (Sec. 210.3-05 and Sec. 210.11-01 through Sec. 210.11-
03 of this chapter) with respect to transactions other than that as to
which action is to be taken as described in this proxy statement;
(6) Information required by Item 301 of Regulation S-K (Sec.
229.301 of this chapter), selected financial data;
(7) Information required by Item 302 of Regulation S-K (Sec.
229.302 of this chapter), supplementary financial information;
(8) Information required by Item 303 of Regulation S-K (Sec.
229.303 of this chapter), management's discussion and analysis of
financial condition and results of operations; and
(9) Information required by Item 304 of Regulation S-K (Sec.
229.304 of this chapter), changes in and disagreements with accountants
on accounting and financial disclosure.
Instruction to paragraph (d) of Item 14: Unless registered on a
national securities exchange or otherwise required to furnish such
information, registered investment companies need not furnish the
information required by paragraphs (d)(6), (d)(7) and (d)(8) of this
Item.
(e) Incorporation by reference. (1) The information required by
paragraph (c) of this section may be incorporated by reference into the
proxy statement to the same extent as would be permitted by Form S-4
(Sec. 239.25 of this chapter) or Form F-4 (Sec. 239.34 of this
chapter), as applicable.
(2) Alternatively, the registrant may incorporate by reference into
the proxy statement the information required by paragraph (c) of this
Item if it is contained in an annual report sent to security holders in
accordance with Sec. 240.14a-3 of this chapter with respect to the same
meeting or solicitation of consents or authorizations that the proxy
statement relates to and the information substantially meets the
disclosure requirements of Item 14 or Item 17 of Form S-4 (Sec. 239.25
of this chapter) or Form F-4 (Sec. 239.34 of this chapter), as
applicable.
Item 15. Acquisition or disposition of property. If action is to be
taken with respect to the acquisition or disposition of any property,
furnish the following information:
(a) Describe briefly the general character and location of the
property.
(b) State the nature and amount of consideration to be paid or
received by the registrant or any subsidiary. To the extent practicable,
outline briefly the facts bearing upon the question of the fairness of
the consideration.
(c) State the name and address of the transferer or transferee, as
the case may be and the nature of any material relationship of such
person to the registrant or any affiliate of the registrant.
(d) Outline briefly any other material features of the contract or
transaction.
Item 16. Restatement of accounts. If action is to be taken with
respect to the restatement of any asset, capital, or surplus account of
the registrant furnish the following information:
(a) State the nature of the restatement and the date as of which it
is to be effective.
(b) Outline briefly the reasons for the restatement and for the
selection of the particular effective date.
(c) State the name and amount of each account (including any reserve
accounts) affected by the restatement and the effect of the restatement
thereon. Tabular presentation of the amounts shall be made when
appropriate, particularly in the case of recapitalizations.
(d) To the extent practicable, state whether and the extent, if any,
to which, the restatement will, as of the date thereof, alter the amount
available for distribution to the holders of equity securities.
Item 17. Action with respect to reports. If action is to be taken
with respect to any report
[[Page 201]]
of the registrant or of its directors, officers or committees or any
minutes of a meeting of its security holders, furnish the following
information:
(a) State whether or not such action is to constitute approval or
disapproval of any of the matters referred to in such reports or
minutes.
(b) Identify each of such matters which it is intended will be
approved or disapproved, and furnish the information required by the
appropriate item or items of this schedule with respect to each such
matter.
Item 18. Matters not required to be submitted. If action is to be
taken with respect to any matter which is not required to be submitted
to a vote of security holders, state the nature of such matter, the
reasons for submitting it to a vote of security holders and what action
is intended to be taken by the registrant in the event of a negative
vote on the matter by the security holders.
Item 19. Amendment of character, bylaws or other documents. If
action is to be taken with respect to any amendment of the registrant's
charter, bylaws or other documents as to which information is not
required above, state briefly the reasons for and the general effect of
such amendment.
Instructions. 1. Where the matter to be acted upon is the
classification of directors, state whether vacancies which occur during
the year may be filled by the board of directors to serve only until the
next annual meeting or may be so filled for the remainder of the full
term.
2. Attention is directed to the discussion of disclosure regarding
anti-takeover and similar proposals in Release No. 34-15230 (October 13,
1978).
Item 20. Other proposed action. If action is to be taken on any
matter not specifically referred to in this Schedule 14A, describe
briefly the substance of each such matter in substantially the same
degree of detail as is required by Items 5 to 19, inclusive, of this
Schedule, and, with respect to investment companies registered under the
Investment Company Act of 1940, Item 22 of this Schedule.
Item 21. Voting procedures. As to each matter which is to be
submitted to a vote of security holders, furnish the following
information:
(a) State the vote required for approval or election, other than for
the approval of auditors.
(b) Disclose the method by which votes will be counted, including
the treatment and effect of abstentions and broker non-votes under
applicable state law as well as registrant charter and by-law
provisions.
Item 22. Information required in investment company proxy statement.
(a) General.
(1) Definitions. Unless the context otherwise requires, terms used
in this Item that are defined in Sec. 240.14a-1 (with respect to proxy
soliciting material), in Sec. 240.14c-1 (with respect to information
statements), and in the Investment Company Act of 1940 shall have the
same meanings provided therein and the following terms shall also apply:
(i) Administrator. The term ``Administrator'' shall mean any person
who provides significant administrative or business affairs management
services to a Fund.
(ii) Affiliated broker. The term ``Affiliated Broker'' shall mean
any broker:
(A) That is an affiliated person of the Fund;
(B) That is an affiliated person of such person; or
(C) An affiliated person of which is an affiliated person of the
Fund, its investment adviser, principal underwriter, or Administrator.
(iii) Distribution plan. The term ``Distribution Plan'' shall mean a
plan adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940 (Sec. 270.12b-1 of this chapter).
(iv) Family of Investment Companies. The term ``Family of Investment
Companies'' shall mean any two or more registered investment companies
that:
(A) Share the same investment adviser or principal underwriter; and
(B) Hold themselves out to investors as related companies for
purposes of investment and investor services.
(v) Fund. The term ``Fund'' shall mean a Registrant or, where the
Registrant is a series company, a separate portfolio of the Registrant.
(vi) Fund complex. The term ``Fund Complex'' shall mean two or more
Funds that:
(A) Hold themselves out to investors as related companies for
purposes of investment and investor services; or
(B) Have a common investment adviser or have an investment adviser
that is an affiliated person of the investment adviser of any of the
other Funds.
(vii) Immediate Family Member. The term ``Immediate Family Member''
shall mean a person's spouse; child residing in the person's household
(including step and adoptive children); and any dependent of the person,
as defined in section 152 of the Internal Revenue Code (26 U.S.C. 152).
(viii) Officer. The term ``Officer'' shall mean the president, vice-
president, secretary, treasurer, controller, or any other officer who
performs policy-making functions.
(ix) Parent. The term ``Parent'' shall mean the affiliated person of
a specified person who controls the specified person directly or
indirectly through one or more intermediaries.
(x) Registrant. The term ``Registrant'' shall mean an investment
company registered under the Investment Company Act of 1940 (15 U.S.C.
80a) or a business development company as defined by section 2(a)(48) of
the
[[Page 202]]
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)).
(xi) Sponsoring Insurance Company. The term ``Sponsoring Insurance
Company'' of a Fund that is a separate account shall mean the insurance
company that establishes and maintains the separate account and that
owns the assets of the separate account.
(xii) Subsidiary. The term ``Subsidiary'' shall mean an affiliated
person of a specified person who is controlled by the specified person
directly, or indirectly through one or more intermediaries.
(2) [Reserved]
(3) General disclosure. Furnish the following information in the
proxy statement of a Fund or Funds:
(i) State the name and address of the Fund's investment adviser,
principal underwriter, and Administrator.
(ii) When a Fund proxy statement solicits a vote on proposals
affecting more than one Fund or class of securities of a Fund (unless
the proposal or proposals are the same and affect all Fund or class
shareholders), present a summary of all of the proposals in tabular form
on one of the first three pages of the proxy statement and indicate
which Fund or class shareholders are solicited with respect to each
proposal.
(iii) Unless the proxy statement is accompanied by a copy of the
Fund's most recent annual report, state prominently in the proxy
statement that the Fund will furnish, without charge, a copy of the
annual report and the most recent semi-annual report succeeding the
annual report, if any, to a shareholder upon request, providing the
name, address, and toll-free telephone number of the person to whom such
request shall be directed (or, if no toll-free telephone number is
provided, a self-addressed postage paid card for requesting the annual
report). The Fund should provide a copy of the annual report and the
most recent semi-annual report succeeding the annual report, if any, to
the requesting shareholder by first class mail, or other means designed
to assure prompt delivery, within three business days of the request.
(iv) If the action to be taken would, directly or indirectly,
establish a new fee or expense or increase any existing fee or expense
to be paid by the Fund or its shareholders, provide a table showing the
current and pro forma fees (with the required examples) using the format
prescribed in the appropriate registration statement form under the
Investment Company Act of 1940 (for open-end management investment
companies, Item 3 of Form N-1A (Sec. 239.15A); for closed-end
management investment companies, Item 3 of Form N-2 (Sec. 239.14); and
for separate accounts that offer variable annuity contracts, Item 3 of
Form N-3 (Sec. 239.17a)).
Instructions. 1. Where approval is sought only for a change in asset
breakpoints for a pre-existing fee that would not have increased the fee
for the previous year (or have the effect of increasing fees or
expenses, but for any other reason would not be reflected in a pro forma
fee table), describe the likely effect of the change in lieu of
providing pro forma fee information.
2. An action would indirectly establish or increase a fee or expense
where, for example, the approval of a new investment advisory contract
would result in higher custodial or transfer agency fees.
3. The tables should be prepared in a manner designed to facilitate
understanding of the impact of any change in fees or expenses.
4. A Fund that offers its shares exclusively to one or more separate
accounts and thus is not required to include a fee table in its
prospectus (see Item 3 of Form N-1A (Sec. 239.15A)) should nonetheless
prepare a table showing current and pro forma expenses and disclose that
the table does not reflect separate account expenses, including sales
load.
(v) If action is to be taken with respect to the election of
directors or the approval of an advisory contract, describe any
purchases or sales of securities of the investment adviser or its
Parents, or Subsidiaries of either, since the beginning of the most
recently completed fiscal year by any director or any nominee for
election as a director of the Fund.
Instructions. 1. Identify the parties, state the consideration, the
terms of payment and describe any arrangement or understanding with
respect to the composition of the board of directors of the Fund or of
the investment adviser, or with respect to the selection of appointment
of any person to any office with either such company.
2. Transactions involving securities in an amount not exceeding one
percent of the outstanding securities of any class of the investment
adviser or any of its Parents or Subsidiaries may be omitted.
(b) Election of Directors. If action is to be taken with respect to
the election of directors of a Fund, furnish the following information
in the proxy statement in addition to the information (and in the
format) required by paragraphs (d)(2) (other than (d)(2)(ii)(D)),
(d)(3), (f), (g), and (h) of Item 7 of Schedule 14A.
Instructions to introductory text of paragraph (b). 1. Furnish
information with respect to a prospective investment adviser to the
extent applicable.
2. If the solicitation is made by or on behalf of a person other
than the Fund or an investment adviser of the Fund, provide information
only as to nominees of the person making the solicitation.
3. When providing information about directors and nominees for
election as directors in response to this Item 22(b), furnish
information for directors or nominees who are or would be ``interested
persons'' of the Fund
[[Page 203]]
within the meaning of section 2(a)(19) of the Investment Company Act of
1940 (15 U.S.C. 80a-2(a)(19)) separately from the information for
directors or nominees who are not or would not be interested persons of
the Fund. For example, when furnishing information in a table, you
should provide separate tables (or separate sections of a single table)
for directors and nominees who are or would be interested persons and
for directors or nominees who are not or would not be interested
persons. When furnishing information in narrative form, indicate by
heading or otherwise the directors or nominees who are or would be
interested persons and the directors or nominees who are not or would
not be interested persons.
4. No information need be given about any director whose term of
office as a director will not continue after the meeting to which the
proxy statement relates.
(1) Provide the information required by the following table for each
director, nominee for election as director, Officer of the Fund, person
chosen to become an Officer of the Fund, and, if the Fund has an
advisory board, member of the board. Explain in a footnote to the table
any family relationship between the persons listed.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5) (6)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Name, Address, and Age............. Position(s) Held with Term of Office and Principal Number of Portfolios Other Directorships
Fund. Length of Time Served. Occupation(s) During in Fund Complex Held by Director or
Past 5 Years. Overseen by Director Nominee for Director
or Nominee for
Director.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Instructions to paragraph (b)(1). 1. For purposes of this paragraph,
the term ``family relationship'' means any relationship by blood,
marriage, or adoption, not more remote than first cousin.
2. No nominee or person chosen to become a director or Officer who
has not consented to act as such may be named in response to this Item.
In this regard, see Rule 14a-4(d) under the Exchange Act (Sec. 240.14a-
4(d)).
3. If fewer nominees are named than the number fixed by or pursuant
to the governing instruments, state the reasons for this procedure and
that the proxies cannot be voted for a greater number of persons than
the number of nominees named.
4. For each director or nominee for election as director who is or
would be an ``interested person'' of the Fund within the meaning of
section 2(a)(19) of the Investment Company Act of 1940 (15 U.S.C. 80a-
2(a)(19)), describe, in a footnote or otherwise, the relationship,
events, or transactions by reason of which the director or nominee is or
would be an interested person.
5. State the principal business of any company listed under column
(4) unless the principal business is implicit in its name.
6. Include in column (5) the total number of separate portfolios
that a nominee for election as director would oversee if he were
elected.
7. Indicate in column (6) directorships not included in column (5)
that are held by a director or nominee for election as director in any
company with a class of securities registered pursuant to section 12 of
the Exchange Act (15 U.S.C. 78l), or subject to the requirements of
section 15(d) of the Exchange Act (15 U.S.C. 78o(d)), or any company
registered as an investment company under the Investment Company Act of
1940, (15 U.S.C. 80a), as amended, and name the companies in which the
directorships are held. Where the other directorships include
directorships overseeing two or more portfolios in the same Fund
Complex, identify the Fund Complex and provide the number of portfolios
overseen as a director in the Fund Complex rather than listing each
portfolio separately.
(2) For each individual listed in column (1) of the table required
by paragraph (b)(1) of this Item, except for any director or nominee for
election as director who is not or would not be an ``interested person''
of the Fund within the meaning of section 2(a)(19) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)(19)), describe any positions,
including as an officer, employee, director, or general partner, held
with affiliated persons or principal underwriters of the Fund.
Instruction to paragraph (b)(2). When an individual holds the same
position(s) with two or more registered investment companies that are
part of the same Fund Complex, identify the Fund Complex and provide the
number of registered investment companies for which the position(s) are
held rather than listing each registered investment company separately.
(3) Describe briefly any arrangement or understanding between any
director, nominee for election as director, Officer, or person chosen to
become an Officer, and any other person(s) (naming the person(s))
pursuant to which he was or is to be selected as a director, nominee, or
Officer.
Instruction to paragraph (b)(3). Do not include arrangements or
understandings with directors or Officers acting solely in their
capacities as such.
[[Page 204]]
(4) Unless disclosed in the table required by paragraph (b)(1) of
this Item, describe any positions, including as an officer, employee,
director, or general partner, held by any director or nominee for
election as director, who is not or would not be an ``interested
person'' of the Fund within the meaning of section 2(a)(19) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(19)), or Immediate
Family Member of the director or nominee, during the past five years,
with:
(i) The Fund;
(ii) An investment company, or a person that would be an investment
company but for the exclusions provided by sections 3(c)(1) and 3(c)(7)
of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(1) and
(c)(7)), having the same investment adviser, principal underwriter, or
Sponsoring Insurance Company as the Fund or having an investment
adviser, principal underwriter, or Sponsoring Insurance Company that
directly or indirectly controls, is controlled by, or is under common
control with an investment adviser, principal underwriter, or Sponsoring
Insurance Company of the Fund;
(iii) An investment adviser, principal underwriter, Sponsoring
Insurance Company, or affiliated person of the Fund; or
(iv) Any person directly or indirectly controlling, controlled by,
or under common control with an investment adviser, principal
underwriter, or Sponsoring Insurance Company of the Fund.
Instruction to paragraph (b)(4). When an individual holds the same
position(s) with two or more portfolios that are part of the same Fund
Complex, identify the Fund Complex and provide the number of portfolios
for which the position(s) are held rather than listing each portfolio
separately.
(5) For each director or nominee for election as director, state the
dollar range of equity securities beneficially owned by the director or
nominee as required by the following table:
(i) In the Fund; and
(ii) On an aggregate basis, in any registered investment companies
overseen or to be overseen by the director or nominee within the same
Family of Investment Companies as the Fund.
------------------------------------------------------------------------
(1) (2) (3)
------------------------------------------------------------------------
Name of Director or Nominee..... Dollar Range of Aggregate Dollar
Equity Securities Range of Equity
in the Fund. Securities in All
Funds Overseen or
to be Overseen by
Director or
Nominee in Family
of Investment
Companies
------------------------------------------------------------------------
Instructions to paragraph (b)(5). 1. Information should be provided
as of the most recent practicable date. Specify the valuation date by
footnote or otherwise.
2. Determine ``beneficial ownership'' in accordance with rule 16a-
1(a)(2) under the Exchange Act (Sec. 240.16a-1(a)(2)).
3. If action is to be taken with respect to more than one Fund,
disclose in column (2) the dollar range of equity securities
beneficially owned by a director or nominee in each such Fund overseen
or to be overseen by the director or nominee.
4. In disclosing the dollar range of equity securities beneficially
owned by a director or nominee in columns (2) and (3), use the following
ranges: none, $1-$10,000, $10,001-$50,000, $50,001-$100,000, or over
$100,000.
(6) For each director or nominee for election as director who is not
or would not be an ``interested person'' of the Fund within the meaning
of section 2(a)(19) of the Investment Company Act of 1940 (15 U.S.C.
80a-2(a)(19), and his Immediate Family Members, furnish the information
required by the following table as to each class of securities owned
beneficially or of record in:
(i) An investment adviser, principal underwriter, or Sponsoring
Insurance Company of the Fund; or
(ii) A person (other than a registered investment company) directly
or indirectly controlling, controlled by, or under common control with
an investment adviser, principal underwriter, or Sponsoring Insurance
Company of the Fund:
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5) (6)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Name of Director or Nominee........ Name of Owners and Company............... Title of Class....... Value of Securities.. Percent of Class
Relationships to
Director or Nominee.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Instructions to paragraph (b)(6). 1. Information should be provided
as of the most recent practicable date. Specify the valuation date by
footnote or otherwise.
2. An individual is a ``beneficial owner'' of a security if he is a
``beneficial owner'' under either rule 13d-3 or rule 16a-1(a)(2) under
the Exchange Act (Sec. Sec. 240.13d-3 or 240.16a-1(a)(2)).
3. Identify the company in which the director, nominee, or Immediate
Family Member of the director or nominee owns securities in column (3).
When the company is a person directly or indirectly controlling,
controlled by, or under common control with an investment adviser,
principal underwriter, or Sponsoring Insurance Company, describe the
[[Page 205]]
company's relationship with the investment adviser, principal
underwriter, or Sponsoring Insurance Company.
4. Provide the information required by columns (5) and (6) on an
aggregate basis for each director (or nominee) and his Immediate Family
Members.
(7) Unless disclosed in response to paragraph (b)(6) of this Item,
describe any direct or indirect interest, the value of which exceeds
$60,000, of each director or nominee for election as director who is not
or would not be an ``interested person'' of the Fund within the meaning
of section 2(a)(19) of the Investment Company Act of 1940 (15 U.S.C.
80a-2(a)(19)), or Immediate Family Member of the director or nominee,
during the past five years, in:
(i) An investment adviser, principal underwriter, or Sponsoring
Insurance Company of the Fund; or
(ii) A person (other than a registered investment company) directly
or indirectly controlling, controlled by, or under common control with
an investment adviser, principal underwriter, or Sponsoring Insurance
Company of the Fund.
Instructions to paragraph (b)(7). 1. A director, nominee, or
Immediate Family Member has an interest in a company if he is a party to
a contract, arrangement, or understanding with respect to any securities
of, or interest in, the company.
2. The interest of the director (or nominee) and the interests of
his Immediate Family Members should be aggregated in determining whether
the value exceeds $60,000.
(8) Describe briefly any material interest, direct or indirect, of
any director or nominee for election as director who is not or would not
be an ``interested person'' of the Fund within the meaning of section
2(a)(19) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(19)),
or Immediate Family Member of the director or nominee, in any
transaction, or series of similar transactions, since the beginning of
the last two completed fiscal years of the Fund, or in any currently
proposed transaction, or series of similar transactions, in which the
amount involved exceeds $60,000 and to which any of the following
persons was or is to be a party:
(i) The Fund;
(ii) An Officer of the Fund;
(iii) An investment company, or a person that would be an investment
company but for the exclusions provided by sections 3(c)(1) and 3(c)(7)
of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(1) and
(c)(7)), having the same investment adviser, principal underwriter, or
Sponsoring Insurance Company as the Fund or having an investment
adviser, principal underwriter, or Sponsoring Insurance Company that
directly or indirectly controls, is controlled by, or is under common
control with an investment adviser, principal underwriter, or Sponsoring
Insurance Company of the Fund;
(iv) An Officer of an investment company, or a person that would be
an investment company but for the exclusions provided by sections
3(c)(1) and 3(c)(7) of the Investment Company Act of 1940 (15 U.S.C.
80a-3(c)(1) and (c)(7)), having the same investment adviser, principal
underwriter, or Sponsoring Insurance Company as the Fund or having an
investment adviser, principal underwriter, or Sponsoring Insurance
Company that directly or indirectly controls, is controlled by, or is
under common control with an investment adviser, principal underwriter,
or Sponsoring Insurance Company of the Fund;
(v) An investment adviser, principal underwriter, or Sponsoring
Insurance Company of the Fund;
(vi) An Officer of an investment adviser, principal underwriter, or
Sponsoring Insurance Company of the Fund;
(vii) A person directly or indirectly controlling, controlled by, or
under common control with an investment adviser, principal underwriter,
or Sponsoring Insurance Company of the Fund; or
(viii) An Officer of a person directly or indirectly controlling,
controlled by, or under common control with an investment adviser,
principal underwriter, or Sponsoring Insurance Company of the Fund.
Instructions to paragraph (b)(8). 1. Include the name of each
director, nominee, or Immediate Family Member whose interest in any
transaction or series of similar transactions is described and the
nature of the circumstances by reason of which the interest is required
to be described.
2. State the nature of the interest, the approximate dollar amount
involved in the transaction, and, where practicable, the approximate
dollar amount of the interest.
3. In computing the amount involved in the transaction or series of
similar transactions, include all periodic payments in the case of any
lease or other agreement providing for periodic payments.
4. Compute the amount of the interest of any director, nominee, or
Immediate Family Member of the director or nominee without regard to the
amount of profit or loss involved in the transaction(s).
5. As to any transaction involving the purchase or sale of assets,
state the cost of the assets to the purchaser and, if acquired by the
seller within two years prior to the transaction, the cost to the
seller. Describe the method used in determining the purchase or sale
price and the name of the person making the determination.
6. If the proxy statement relates to multiple portfolios of a series
Fund with different fiscal years, then, in determining the date that is
the beginning of the last two completed fiscal years of the Fund, use
the
[[Page 206]]
earliest date of any series covered by the proxy statement.
7. Disclose indirect, as well as direct, material interests in
transactions. A person who has a position or relationship with, or
interest in, a company that engages in a transaction with one of the
persons listed in paragraphs (b)(8)(i) through (b)(8)(viii) of this Item
may have an indirect interest in the transaction by reason of the
position, relationship, or interest. The interest in the transaction,
however, will not be deemed ``material'' within the meaning of paragraph
(b)(8) of this Item where the interest of the director, nominee, or
Immediate Family Member arises solely from the holding of an equity
interest (including a limited partnership interest, but excluding a
general partnership interest) or a creditor interest in a company that
is a party to the transaction with one of the persons specified in
paragraphs (b)(8)(i) through (b)(8)(viii) of this Item, and the
transaction is not material to the company.
8. The materiality of any interest is to be determined on the basis
of the significance of the information to investors in light of all the
circumstances of the particular case. The importance of the interest to
the person having the interest, the relationship of the parties to the
transaction with each other, and the amount involved in the transaction
are among the factors to be considered in determining the significance
of the information to investors.
9. No information need be given as to any transaction where the
interest of the director, nominee, or Immediate Family Member arises
solely from the ownership of securities of a person specified in
paragraphs (b)(8)(i) through (b)(8)(viii) of this Item and the director,
nominee, or Immediate Family Member receives no extra or special benefit
not shared on a pro rata basis by all holders of the class of
securities.
10. Transactions include loans, lines of credit, and other
indebtedness. For indebtedness, indicate the largest aggregate amount of
indebtedness outstanding at any time during the period, the nature of
the indebtedness and the transaction in which it was incurred, the
amount outstanding as of the latest practicable date, and the rate of
interest paid or charged.
11. No information need be given as to any routine, retail
transaction. For example, the Fund need not disclose that a director has
a credit card, bank or brokerage account, residential mortgage, or
insurance policy with a person specified in paragraphs (b)(8)(i) through
(b)(8)(viii) of this Item unless the director is accorded special
treatment.
(9) Describe briefly any direct or indirect relationship, in which
the amount involved exceeds $60,000, of any director or nominee for
election as director who is not or would not be an ``interested person''
of the Fund within the meaning of section 2(a)(19) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)(19)), or Immediate Family Member
of the director or nominee, that exists, or has existed at any time
since the beginning of the last two completed fiscal years of the Fund,
or is currently proposed, with any of the persons specified in
paragraphs (b)(8)(i) through (b)(8)(viii) of this Item. Relationships
include:
(i) Payments for property or services to or from any person
specified in paragraphs (b)(8)(i) through (b)(8)(viii) of this Item;
(ii) Provision of legal services to any person specified in
paragraphs (b)(8)(i) through (b)(8)(viii) of this Item;
(iii) Provision of investment banking services to any person
specified in paragraphs (b)(8)(i) through (b)(8)(viii) of this Item,
other than as a participating underwriter in a syndicate; and
(iv) Any consulting or other relationship that is substantially
similar in nature and scope to the relationships listed in paragraphs
(b)(9)(i) through (b)(9)(iii) of this Item.
Instructions to paragraph (b)(9). 1. Include the name of each
director, nominee, or Immediate Family Member whose relationship is
described and the nature of the circumstances by reason of which the
relationship is required to be described.
2. State the nature of the relationship and the amount of business
conducted between the director, nominee, or Immediate Family Member and
the person specified in paragraphs (b)(8)(i) through (b)(8)(viii) of
this Item as a result of the relationship since the beginning of the
last two completed fiscal years of the Fund or proposed to be done
during the Fund's current fiscal year.
3. In computing the amount involved in a relationship, include all
periodic payments in the case of any agreement providing for periodic
payments.
4. If the proxy statement relates to multiple portfolios of a series
Fund with different fiscal years, then, in determining the date that is
the beginning of the last two completed fiscal years of the Fund, use
the earliest date of any series covered by the proxy statement.
5. Disclose indirect, as well as direct, relationships. A person who
has a position or relationship with, or interest in, a company that has
a relationship with one of the persons listed in paragraphs (b)(8)(i)
through (b)(8)(viii) of this Item may have an indirect relationship by
reason of the position, relationship, or interest.
6. In determining whether the amount involved in a relationship
exceeds $60,000, amounts involved in a relationship of the director (or
nominee) should be aggregated with those of his Immediate Family
Members.
[[Page 207]]
7. In the case of an indirect interest, identify the company with
which a person specified in paragraphs (b)(8)(i) through (b)(8)(viii) of
this Item has a relationship; the name of the director, nominee, or
Immediate Family Member affiliated with the company and the nature of
the affiliation; and the amount of business conducted between the
company and the person specified in paragraphs (b)(8)(i) through
(b)(8)(viii) of this Item since the beginning of the last two completed
fiscal years of the Fund or proposed to be done during the Fund's
current fiscal year.
8. In calculating payments for property and services for purposes of
paragraph (b)(9)(i) of this Item, the following may be excluded:
A. Payments where the transaction involves the rendering of services
as a common contract carrier, or public utility, at rates or charges
fixed in conformity with law or governmental authority; or
B. Payments that arise solely from the ownership of securities of a
person specified in paragraphs (b)(8)(i) through (b)(8)(viii) of this
Item and no extra or special benefit not shared on a pro rata basis by
all holders of the class of securities is received.
9. No information need be given as to any routine, retail
relationship. For example, the Fund need not disclose that a director
has a credit card, bank or brokerage account, residential mortgage, or
insurance policy with a person specified in paragraphs (b)(8)(i) through
(b)(8)(viii) of this Item unless the director is accorded special
treatment.
(10) If an Officer of an investment adviser, principal underwriter,
or Sponsoring Insurance Company of the Fund, or an Officer of a person
directly or indirectly controlling, controlled by, or under common
control with an investment adviser, principal underwriter, or Sponsoring
Insurance Company of the Fund, serves, or has served since the beginning
of the last two completed fiscal years of the Fund, on the board of
directors of a company where a director of the Fund or nominee for
election as director who is not or would not be an ``interested person''
of the Fund within the meaning of section 2(a)(19) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)(19)), or Immediate Family Member
of the director or nominee, is, or was since the beginning of the last
two completed fiscal years of the Fund, an Officer, identify:
(i) The company;
(ii) The individual who serves or has served as a director of the
company and the period of service as director;
(iii)The investment adviser, principal underwriter, or Sponsoring
Insurance Company or person controlling, controlled by, or under common
control with the investment adviser, principal underwriter, or
Sponsoring Insurance Company where the individual named in paragraph
(b)(10)(ii) of this Item holds or held office and the office held; and
(iv) The director of the Fund, nominee for election as director, or
Immediate Family Member who is or was an Officer of the company; the
office held; and the period of holding the office.
Instruction to paragraph (b)(10). If the proxy statement relates to
multiple portfolios of a series Fund with different fiscal years, then,
in determining the date that is the beginning of the last two completed
fiscal years of the Fund, use the earliest date of any series covered by
the proxy statement.
(11) Provide in tabular form, to the extent practicable, the
information required by Items 401(f) and (g), 404(a) and (c), and 405 of
Regulation S-K (Sec. Sec. 229.401(f) and (g), 229.404(a) and (c), and
229.405 of this chapter).
Instruction to paragraph (b)(11). Information provided under
paragraph (b)(8) of this Item 22 is deemed to satisfy the requirements
of Items 404(a) and (c) of Regulation S-K for information about
directors, nominees for election as directors, and Immediate Family
Members of directors and nominees, and need not be provided under this
paragraph (b)(11).
(12) Describe briefly any material pending legal proceedings, other
than ordinary routine litigation incidental to the Fund's business, to
which any director or nominee for director or affiliated person of such
director or nominee is a party adverse to the Fund or any of its
affiliated persons or has a material interest adverse to the Fund or any
of its affiliated persons. Include the name of the court where the case
is pending, the date instituted, the principal parties, a description of
the factual basis alleged to underlie the proceeding, and the relief
sought.
(13) For all directors, and for each of the three highest-paid
Officers that have aggregate compensation from the Fund for the most
recently completed fiscal year in excess of $60,000 (``Compensated
Persons''):
(i) Furnish the information required by the following table for the
last fiscal year:
Compensation Table
----------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
----------------------------------------------------------------------------------------------------------------
Name of Person, Position........ Aggregate Pension or Estimated Annual Total Compensation
Compensation From Retirement Benefits Upon From Fund and
Fund. Benefits Accrued Retirement. Complex Paid to
as Part of Fund Directors
Expenses.
----------------------------------------------------------------------------------------------------------------
[[Page 208]]
Instructions to paragraph (b)(13)(i). 1. For column (1), indicate,
if necessary, the capacity in which the remuneration is received. For
Compensated Persons that are directors of the Fund, compensation is
amounts received for service as a director.
2. If the Fund has not completed its first full year since its
organization, furnish the information for the current fiscal year,
estimating future payments that would be made pursuant to an existing
agreement or understanding. Disclose in a footnote to the Compensation
Table the period for which the information is furnished.
3. Include in column (2) amounts deferred at the election of the
Compensated Person, whether pursuant to a plan established under Section
401(k) of the Internal Revenue Code (26 U.S.C. 401(k)) or otherwise, for
the fiscal year in which earned. Disclose in a footnote to the
Compensation Table the total amount of deferred compensation (including
interest) payable to or accrued for any Compensated Person.
4. Include in columns (3) and (4) all pension or retirement benefits
proposed to be paid under any existing plan in the event of retirement
at normal retirement date, directly or indirectly, by the Fund or any of
its Subsidiaries, or by other companies in the Fund Complex. Omit column
(4) where retirement benefits are not determinable.
5. For any defined benefit or actuarial plan under which benefits
are determined primarily by final compensation (or average final
compensation) and years of service, provide the information required in
column (4) in a separate table showing estimated annual benefits payable
upon retirement (including amounts attributable to any defined benefit
supplementary or excess pension award plans) in specified compensation
and years of service classifications. Also provide the estimated
credited years of service for each Compensated Person.
6. Include in column (5) only aggregate compensation paid to a
director for service on the board and other boards of investment
companies in a Fund Complex specifying the number of such other
investment companies.
(ii) Describe briefly the material provisions of any pension,
retirement, or other plan or any arrangement other than fee arrangements
disclosed in paragraph (b)(13)(i) of this Item pursuant to which
Compensated Persons are or may be compensated for any services provided,
including amounts paid, if any, to the Compensated Person under any such
arrangements during the most recently completed fiscal year.
Specifically include the criteria used to determine amounts payable
under any plan, the length of service or vesting period required by the
plan, the retirement age or other event that gives rise to payments
under the plan, and whether the payment of benefits is secured or funded
by the Fund.
(iii) With respect to each Compensated Person, business development
companies must include the information required by Items 402(b)(2)(iv)
and 402(c) of Regulation S-K (Sec. Sec. 229.402(b)(2)(iv) and
229.402(c) of this chapter).
(14) State whether or not the Fund has a separately designated audit
committee established in accordance with section 3(a)(58)(A) of the Act
(15 U.S.C. 78c(a)(58)(A)). If the entire board of directors is acting as
the Fund's audit committee as specified in section 3(a)(58)(B) of the
Act (15 U.S.C. 78c(a)(58)(B)), so state. If applicable, provide the
disclosure required by Sec. 240.10A-3(d) regarding an exemption from
the listing standards for audit committees. Identify the other standing
committees of the Fund's board of directors, and provide the following
information about each committee, including any separately designated
audit committee and any nominating committee:
(i) A concise statement of the functions of the committee;
(ii) The members of the committee and, in the case of a nominating
committee, whether or not the members of the committee are ``interested
persons'' of the Fund as defined in section 2(a)(19) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)(19)); and
(iii) The number of committee meetings held during the last fiscal
year.
Instruction to paragraph (b)(14): For purposes of Item 22(b)(14),
the term ``nominating committee'' refers not only to nominating
committees and committees performing similar functions, but also to
groups of directors fulfilling the role of a nominating committee,
including the entire board of directors.
(c) Approval of investment advisory contract. If action is to be
taken with respect to an investment advisory contract, include the
following information in the proxy statement.
Instruction. Furnish information with respect to a prospective
investment adviser to the extent applicable (including the name and
address of the prospective investment adviser).
(1) With respect to the existing investment advisory contract:
(i) State the date of the contract and the date on which it was last
submitted to a vote of security holders of the Fund, including the
purpose of such submission;
(ii) Briefly describe the terms of the contract, including the rate
of compensation of the investment adviser;
(iii) State the aggregate amount of the investment adviser's fee and
the amount and purpose of any other material payments by the Fund to the
investment adviser, or any affiliated person of the investment adviser,
during the last fiscal year of the Fund;
[[Page 209]]
(iv) If any person is acting as an investment adviser of the Fund
other than pursuant to a written contract that has been approved by the
security holders of the company, identify the person and describe the
nature of the services and arrangements;
(v) Describe any action taken with respect to the investment
advisory contract since the beginning of the Fund's last fiscal year by
the board of directors of the Fund (unless described in response to
paragraph (c)(1)(vi)) of this Item 22); and
(vi) If an investment advisory contract was terminated or not
renewed for any reason, state the date of such termination or non-
renewal, identify the parties involved, and describe the circumstances
of such termination or non-renewal.
(2) State the name, address and principal occupation of the
principal executive officer and each director or general partner of the
investment adviser.
Instruction. If the investment adviser is a partnership with more
than ten general partners, name:
(i) The general partners with the five largest economic interests in
the partnership, and, if different, those general partners comprising
the management or executive committee of the partnership or exercising
similar authority;
(ii) The general partners with significant management
responsibilities relating to the fund.
(3) State the names and addresses of all Parents of the investment
adviser and show the basis of control of the investment adviser and each
Parent by its immediate Parent.
Instructions. 1. If any person named is a corporation, include the
percentage of its voting securities owned by its immediate Parent.
2. If any person named is a partnership, name the general partners
having the three largest partnership interests (computed by whatever
method is appropriate in the particular case).
(4) If the investment adviser is a corporation and if, to the
knowledge of the persons making the solicitation or the persons on whose
behalf the solicitation is made, any person not named in answer to
paragraph (c)(3) of this Item 22 owns, of record or beneficially, ten
percent or more of the outstanding voting securities of the investment
adviser, indicate that fact and state the name and address of each such
person.
(5) Name each officer or director of the Fund who is an officer,
employee, director, general partner or shareholder of the investment
adviser. As to any officer or director who is not a director or general
partner of the investment adviser and who owns securities or has any
other material direct or indirect interest in the investment adviser or
any other person controlling, controlled by or under common control with
the investment adviser, describe the nature of such interest.
(6) Describe briefly and state the approximate amount of, where
practicable, any material interest, direct or indirect, of any director
of the Fund in any material transactions since the beginning of the most
recently completed fiscal year, or in any material proposed
transactions, to which the investment adviser of the Fund, any Parent or
Subsidiary of the investment adviser (other than another Fund), or any
Subsidiary of the Parent of such entities was or is to be a party.
Instructions. 1. Include the name of each person whose interest in
any transaction is described and the nature of the relationship by
reason of which such interest is required to be described. Where it is
not practicable to state the approximate amount of the interest,
indicate the approximate amount involved in the transaction.
2. As to any transaction involving the purchase or sale of assets by
or to the investment adviser, state the cost of the assets to the
purchaser and the cost thereof to the seller if acquired by the seller
within two years prior to the transaction.
3. If the interest of any person arises from the position of the
person as a partner in a partnership, the proportionate interest of such
person in transactions to which the partnership is a party need not be
set forth, but state the amount involved in the transaction with the
partnership.
4. No information need be given in response to this paragraph (c)(6)
of Item 22 with respect to any transaction that is not related to the
business or operations of the Fund and to which neither the Fund nor any
of its Parents or Subsidiaries is a party.
(7) Disclose any financial condition of the investment adviser that
is reasonably likely to impair the financial ability of the adviser to
fulfill its commitment to the fund under the proposed investment
advisory contract.
(8) Describe the nature of the action to be taken on the investment
advisory contract and the reasons therefor, the terms of the contract to
be acted upon, and, if the action is an amendment to, or a replacement
of, an investment advisory contract, the material differences between
the current and proposed contract.
(9) If a change in the investment advisory fee is sought, state:
(i) The aggregate amount of the investment adviser's fee during the
last year;
(ii) The amount that the adviser would have received had the
proposed fee been in effect; and
(iii) The difference between the aggregate amounts stated in
response to paragraphs (i) and (ii) of this item (c)(9) as a percentage
of the amount stated in response to paragraph (i) of this item (c)(9).
[[Page 210]]
(10) If the investment adviser acts as such with respect to any
other Fund having a similar investment objective, identify and state the
size of such other Fund and the rate of the investment adviser's
compensation. Also indicate for any Fund identified whether the
investment adviser has waived, reduced, or otherwise agreed to reduce
its compensation under any applicable contract.
Instruction. Furnish the information in response to this paragraph
(c)(10) of Item 22 in tabular form.
(11) Discuss in reasonable detail the material factors and the
conclusions with respect thereto that form the basis for the
recommendation of the board of directors that the shareholders approve
an investment advisory contract. Include the following in the
discussion:
(i) Factors relating to both the board's selection of the investment
adviser and approval of the advisory fee and any other amounts to be
paid by the Fund under the contract. This would include, but not be
limited to, a discussion of the nature, extent, and quality of the
services to be provided by the investment adviser; the investment
performance of the Fund and the investment adviser; the costs of the
services to be provided and profits to be realized by the investment
adviser and its affiliates from the relationship with the Fund; the
extent to which economies of scale would be realized as the Fund grows;
and whether fee levels reflect these economies of scale for the benefit
of Fund investors. Also indicate in the discussion whether the board
relied upon comparisons of the services to be rendered and the amounts
to be paid under the contract with those under other investment advisory
contracts, such as contracts of the same and other investment advisers
with other registered investment companies or other types of clients
(e.g., pension funds and other institutional investors). If the board
relied upon such comparisons, describe the comparisons that were relied
on and how they assisted the board in determining to recommend that the
shareholders approve the advisory contract; and
(ii) If applicable, any benefits derived or to be derived by the
investment adviser from the relationship with the Fund such as soft
dollar arrangements by which brokers provide research to the Fund or its
investment adviser in return for allocating Fund brokerage.
Instructions. 1. Conclusory statements or a list of factors will not
be considered sufficient disclosure. Relate the factors to the specific
circumstances of the Fund and the investment advisory contract for which
approval is sought and state how the board evaluated each factor. For
example, it is not sufficient to state that the board considered the
amount of the investment advisory fee without stating what the board
concluded about the amount of the fee and how that affected its
determination to recommend approval of the contract.
2. If any factor enumerated in paragraph (c)(11)(i) of this Item 22
is not relevant to the board's evaluation of the investment advisory
contract for which approval is sought, note this and explain the reasons
why that factor is not relevant.
(12) Describe any arrangement or understanding made in connection
with the proposed investment advisory contract with respect to the
composition of the board of directors of the Fund or the investment
adviser or with respect to the selection or appointment of any person to
any office with either such company.
(13) For the most recently completed fiscal year, state:
(i) The aggregate amount of commissions paid to any Affiliated
Broker; and
(ii) The percentage of the Fund's aggregate brokerage commissions
paid to any such Affiliated Broker.
Instruction. Identify each Affiliated Broker and the relationships
that cause the broker to be an Affiliated Broker.
(14) Disclose the amount of any fees paid by the Fund to the
investment adviser, its affiliated persons or any affiliated person of
such person during the most recent fiscal year for services provided to
the Fund (other than under the investment advisory contract or for
brokerage commissions). State whether these services will continue to be
provided after the investment advisory contract is approved.
(d) Approval of distribution plan. If action is to be taken with
respect to a Distribution Plan, include the following information in the
proxy statement.
Instruction. Furnish information on a prospective basis to the
extent applicable.
(1) Describe the nature of the action to be taken on the
Distribution Plan and the reason therefor, the terms of the Distribution
Plan to be acted upon, and, if the action is an amendment to, or a
replacement of, a Distribution Plan, the material differences between
the current and proposed Distribution Plan.
(2) If the Fund has a Distribution Plan in effect:
(i) Provide the date that the Distribution Plan was adopted and the
date of the last amendment, if any;
(ii) Disclose the persons to whom payments may be made under the
Distribution Plan, the rate of the distribution fee and the purposes for
which such fee may be used;
(iii) Disclose the amount of distribution fees paid by the Fund
pursuant to the plan during its most recent fiscal year, both in the
aggregate and as a percentage of the Fund's average net assets during
the period;
[[Page 211]]
(iv) Disclose the name of, and the amount of any payments made under
the Distribution Plan by the Fund during its most recent fiscal year to,
any person who is an affiliated person of the Fund, its investment
adviser, principal underwriter, or Administrator, an affiliated person
of such person, or a person that during the most recent fiscal year
received 10% or more of the aggregate amount paid under the Distribution
Plan by the Fund;
(v) Describe any action taken with respect to the Distribution Plan
since the beginning of the Fund's most recent fiscal year by the board
of directors of the Fund; and
(vi) If a Distribution Plan was or is to be terminated or not
renewed for any reason, state the date or prospective date of such
termination or non-renewal, identify the parties involved, and describe
the circumstances of such termination or non-renewal.
(3) Describe briefly and state the approximate amount of, where
practicable, any material interest, direct or indirect, of any director
or nominee for election as a director of the Fund in any material
transactions since the beginning of the most recently completed fiscal
year, or in any material proposed transactions, to which any person
identified in response to Item 22(d)(2)(iv) was or is to be a party.
Instructions. 1. Include the name of each person whose interest in
any transaction is described and the nature of the relationship by
reason of which such interest is required to be described. Where it is
not practicable to state the approximate amount of the interest,
indicate the approximate amount involved in the transaction.
2. As to any transaction involving the purchase or sale of assets,
state the cost of the assets to the purchaser and the cost thereof to
the seller if acquired by the seller within two years prior to the
transaction.
3. If the interest of any person arises from the position of the
person as a partner in a partnership, the proportionate interest of such
person in transactions to which the partnership is a party need not be
set forth but state the amount involved in the transaction with the
partnership.
4. No information need be given in response to this paragraph (d)(3)
of Item 22 with respect to any transaction that is not related to the
business or operations of the Fund and to which neither the Fund nor any
of its Parents or Subsidiaries is a party.
(4) Discuss in reasonable detail the material factors and the
conclusions with respect thereto which form the basis for the conclusion
of the board of directors that there is a reasonable likelihood that the
proposed Distribution Plan (or amendment thereto) will benefit the Fund
and its shareholders.
Instruction. Conclusory statements or a list of factors will not be
considered sufficient disclosure.
Item 23. Delivery of documents to security holders sharing an
address. If one annual report or proxy statement is being delivered to
two or more security holders who share an address in accordance with
Sec. 240.14a-3(e)(1), furnish the following information:
(a) State that only one annual report or proxy statement, as
applicable, is being delivered to multiple security holders sharing an
address unless the registrant has received contrary instructions from
one or more of the security holders;
(b) Undertake to deliver promptly upon written or oral request a
separate copy of the annual report or proxy statement, as applicable, to
a security holder at a shared address to which a single copy of the
documents was delivered and provide instructions as to how a security
holder can notify the registrant that the security holder wishes to
receive a separate copy of an annual report or proxy statement, as
applicable;
(c) Provide the phone number and mailing address to which a security
holder can direct a notification to the registrant that the security
holder wishes to receive a separate annual report or proxy statement, as
applicable, in the future; and
(d) Provide instructions how security holders sharing an address can
request delivery of a single copy of annual reports or proxy statements
if they are receiving multiple copies of annual reports or proxy
statements.
[51 FR 42063, Nov. 20, 1986; 51 FR 45576, Dec. 19, 1986]
Editorial Note: For Federal Register citations affecting Sec.
240.14a-101, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and on GPO Access.
Sec. 240.14a-102 [Reserved]
Sec. 240.14a-103 Notice of Exempt Solicitation. Information to be
included in statements submitted by or on behalf of a person pursuant
to Sec. 240.14a-6(g).
U.S. Securities and Exchange Commission Washington, DC 20549
Notice of Exempt Solicitation
1. Name of the Registrant:
________________________________________________________________________
2. Name of person relying on exemption:
________________________________________________________________________
3. Address of person relying on exemption:
________________________________________________________________________
[[Page 212]]
4. Written materials. Attach written material required to be submitted
pursuant to Rule 14a-6(g)(1) [Sec. 240.14a-6(g)(1)].
[57 FR 48294, Oct. 22, 1992]
Sec. 240.14a-104 Notice of Exempt Preliminary Roll-up Communication.
Information regarding ownership interests and any potential conflicts
of interest to be included in statements submitted by or on behalf of
a person pursuant to Sec. 240.14a-2(b)(4) and Sec. 240.14a-6(n).
United States Securities and Exchange Commission Washington, D.C. 20549
Notice of Exempt Preliminary Roll-Up Communication
1. Name of registrant appearing on Securities Act of 1933 registration
statement for the roll-up transaction (or, if registration
statement has not been filed, name of entity into which
partnerships are to be rolled up):
________________________________________________________________________
2. Name of partnership that is the subject of the proposed roll-up
transaction:
________________________________________________________________________
3. Name of person relying on exemption:
________________________________________________________________________
4. Address of person relying on exemption:
________________________________________________________________________
5. Ownership interest of security holder in partnership that is the
subject of the proposed roll-up transaction:
________________________________________________________________________
________________________________________________________________________
Note: To the extent that the holder owns securities in any other
entities involved in this roll-up transaction, disclosure of these
interests also should be made.
6. Describe any and all relations of the holder to the parties to the
transaction or to the transaction itself:
a. The holder is engaged in the business of buying and selling limited
partnership interests in the secondary market would be
adversely affected if the roll-up transaction were completed.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
b. The holder would suffer direct (or indirect) material financial
injury if the roll-up transaction were completed since it is a
service provider to an affected limited partnership.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
c. The holder is engaged in another transaction that may be competitive
with the pending roll-up transaction.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
d. Any other relations to the parties involved in the transaction or to
the transaction itself, or any benefits enjoyed by the holder
not shared on a pro rata basis by all other holders of the
same class of securities of the partnership that is the
subject of the proposed roll-up transaction.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
[59 FR 63685, Dec. 8, 1994]
Sec. 240.14b-1 Obligation of registered brokers and dealers in
connection with the prompt forwarding of certain communications to
beneficial owners.
(a) Definitions. Unless the context otherwise requires, all terms
used in this section shall have the same meanings as in the Act and,
with respect to proxy soliciting material, as in Sec. 240.14a-1
thereunder and, with respect to information statements, as in Sec.
240.14c-1 thereunder. In addition, as used in this section, the term
``registrant'' means:
(1) The issuer of a class of securities registered pursuant to
section 12 of the Act; or
(2) An investment company registered under the Investment Company
Act of 1940.
(b) Dissemination and beneficial owner information requirements. A
broker or dealer registered under Section 15 of the Act shall comply
with the following requirements for disseminating certain communications
to beneficial owners and providing beneficial owner information to
registrants.
(1) The broker or dealer shall respond, by first class mail or other
equally prompt means, directly to the registrant no later than seven
business days after the date it receives an inquiry made in accordance
with Sec. 240.14a-13(a) or Sec. 240.14c-7(a) by indicting, by means of
a search card or otherwise:
(i) The approximate number of customers of the broker or dealer who
are beneficial owners of the registrant's securities that are held of
record by the broker, dealer, or its nominee;
(ii) The number of customers of the broker or dealer who are
beneficial owners of the registrant's securities who have objected to
disclosure of
[[Page 213]]
their names, addresses,and securities positions if the registrant has
indicated, pursuant to Sec. 240.14a-13(a)(1)(ii)(A) or Sec. 240.14c-
7(a)(1)(ii)(A), that it will distribute the annual report to security
holders to beneficial owners of its securities whose names, addresses
and securities positions are disclosed pursuant to paragraph (b)(3) of
this section; and
(iii) The identity of the designated agent of the broker or dealer,
if any, acting on its behalf in fulfilling its obligations under
paragraph (b)(3) of this section; Provided, however, that if the broker
or dealer has informed the registrant that a designated office(s) or
department(s) is to receive such inquiries, receipt for purposes of
paragraph (b)(1) of this section shall mean receipt by such designated
office(s) or department(s).
(2) The broker or dealer shall, upon receipt of the proxy, other
proxy soliciting material, information statement, and/or annual reports
to security holders, forward such materials to its customers who are
beneficial owners of the registrant's securities no later than five
business days after receipt of the proxy material, information statement
or annual reports.
Note to paragraph (b)(2): At the request of a registrant, or on its
own initiative so long as the registrant does not object, a broker or
dealer may, but is not required to, deliver one annual report, proxy
statement or information statement to more than one beneficial owner
sharing an address if the requirements set forth in Sec. 240.14a-
3(e)(1) (with respect to annual reports and proxy statements) and Sec.
240.14c-3(c) (with respect to annual reports and information statements)
applicable to registrants, with the exception of Sec. 240.14a-
3(e)(1)(i)(E), are satisfied instead by the broker or dealer.
(3) The broker or dealer shall, through its agent or directly:
(i) Provide the registrant, upon the registrant's request, with the
names, addresses, and securities positions, compiled as of a date
specified in the registrant's request which is no earlier than five
business days after the date the registrant's request is received, of
its customers who are beneficial owners of the registrant's securities
and who have not objected to disclosure of such information; Provided ,
however, that if the broker or dealer has informed the registrant that a
designated office(s) or department(s) is to receive such requests,
receipt shall mean receipt by such designated office(s) or
department(s); and
(ii) Transmit the data specified in paragraph (b)(3)(i) of this
section to the registrant no later than five business days after the
record date or other date specified by the registrant.
Note 1: Where a broker or dealer employs a designated agent to act
on its behalf in performing the obligations imposed on the broker or
dealer by paragraph (b)(3) of this section, the five business day time
period for determining the date as of which the beneficial owner
information is to be compiled is calculated from the date the designated
agent receives the registrant's request. In complying with the
registrant's request for beneficial owner information under paragraph
(b)(3) of this section, a broker or dealer need only supply the
registrant with the names, addresses, and securities positions of non-
objecting beneficial owners.
Note 2: If a broker or dealer receives a registrant's request less
than five business days before the requested compilation date, it must
provide a list compiled as of a date that is no more than five business
days after receipt and transmit the list within five business days after
the compilation date.
(c) Exceptions to dissemination and beneficial owner information
requirements. A broker or dealer registered under section 15 of the Act
shall be subject to the following with respect to its dissemination and
beneficial owner information requirements.
(1) With regard to beneficial owners of exempt employee benefit plan
securities, the broker or dealer shall:
(i) Not include information in its response pursuant to paragraph
(b)(1) of this section or forward proxies (or in lieu thereof requests
for voting instructions), proxy soliciting material, information
statements, or annual reports to security holders pursuant to paragraph
(b)(2) of this section to such beneficial owners; and
(ii) Not include in its response, pursuant to paragraph (b)(3) of
this section, data concerning such beneficial owners.
(2) A broker or dealer need not satisfy:
(i) Its obligations under paragraphs (b)(2) and (b)(3) of this
section if a registrant does not provide assurance of
[[Page 214]]
reimbursement of the broker's or dealer's reasonable expenses, both
direct and indirect, incurred in connection with performing the
obligations imposed by paragraphs (b)(2) and (b)(3) of this section; or
(ii) Its obligation under paragraph (b)(2) of this section to
forward annual reports to non-objecting beneficial owners identified by
the broker or dealer, through its agent or directly, pursuant to
paragraph (b)(3) of this section if the registrant notifies the broker
or dealer pursuant to Sec. 240.14a-13(c) or Sec. 240.14c-7(c) that the
registrant will mail the annual report to such non-objecting beneficial
owners identified by the broker or dealer and delivered in a list to the
registrant pursuant to paragraph (b)(3) of this section.
(3) In its response pursuant to paragraph (b)(1) of this section, a
broker or dealer shall not include information about annual reports,
proxy statements or information statements that will not be delivered to
security holders sharing an address because of the broker or dealer's
reliance on the procedures referred to in the Note to paragraph (b)(2)
of this section.
[57 FR 1099, Jan. 10, 1992, as amended at 65 FR 65751, Nov. 2, 2000]
Sec. 240.14b-2 Obligation of banks, associations and other entities
that exercise fiduciary powers in connection with the prompt forwarding
of certain communications to beneficial owners.
(a) Definitions. Unless the context otherwise requires, all terms
used in this section shall have the same meanings as in the Act and,
with respect to proxy soliciting material, as in Sec. 240.14a-1
thereunder and, with respect to information statements, as in Sec.
240.14c-1 thereunder. In addition, as used in this section, the
following terms shall apply:
(1) The term bank means a bank, association, or other entity that
exercises fiduciary powers.
(2) The term beneficial owner includes any person who has or shares,
pursuant to an instrument, agreement, or otherwise, the power to vote,
or to direct the voting of a security.
Note 1: If more than one person shares voting power, the provisions
of the instrument creating that voting power shall govern with respect
to whether consent to disclosure of beneficial owner information has
been given.
Note 2: If more than one person shares voting power or if the
instrument creating that voting power provides that such power shall be
exercised by different persons depending on the nature of the corporate
action involved, all persons entitled to exercise such power shall be
deemed beneficial owners; Provided, however, that only one such
beneficial owner need be designated among the beneficial owners to
receive proxies or requests for voting instructions, other proxy
soliciting material, information statements, and/or annual reports to
security holders, if the person so designated assumes the obligation to
disseminate, in a timely manner, such materials to the other beneficial
owners.
(3) The term registrant means:
(i) The issuer of a class of securities registered pursuant to
section 12 of the Act; or
(ii) An investment company registered under the Investment Company
Act of 1940.
(b) Dissemination and beneficial owner information requirements. A
bank shall comply with the following requirements for disseminating
certain communications to beneficial owners and providing beneficial
owner information to registrants.
(1) The bank shall:
(i) Respond, by first class mail or other equally prompt means,
directly to the registrant, no later than one business day after the
date it receives an inquiry made in accordance with Sec. 240.14a-13(a)
or Sec. 240.14c-7(a) by indicating the name and address of each of its
respondent banks that holds the registrant's securities on behalf of
beneficial owners, if any; and
(ii) Respond, by first class mail or other equally prompt means,
directly to the registrant no later than seven business days after the
date it receives an inquiry made in accordance with Sec. 240.14a-13(a)
or Sec. 240.14c-7(a) by indicating, by means of a search card or
otherwise:
(A) The approximate number of customers of the bank who are
beneficial owners of the registrant's securities that are held of record
by the bank or its nominee;
(B) If the registrant has indicated, pursuant to Sec. 240.14a-
13(a)(1)(ii)(A) or
[[Page 215]]
Sec. 240.14c-7(a)(1)(ii)(A), that it will distribute the annual report
to security holders to beneficial owners of its securities whose names,
addresses, and securities positions are disclosed pursuant to paragraphs
(b)(4) (ii) and (iii) of this section:
(1) With respect to customer accounts opened on or before December
28, 1986, the number of beneficial owners of the registrant's securities
who have affirmatively consented to disclosure of their names,
addresses, and securities positions; and
(2) With respect to customer accounts opened after December 28,
1986, the number of beneficial owners of the registrant's securities who
have not objected to disclosure of their names, addresses, and
securities positions; and
(C) The identity of its designated agent, if any, acting on its
behalf in fulfilling its obligations under paragraphs (b)(4) (ii) and
(iii) of this section;
Provided, however, that, if the bank or respondent bank has informed the
registrant that a designated office(s) or department(s) is to receive
such inquiries, receipt for purposes of paragraphs (b)(1) (i) and (ii)
of this section shall mean receipt by such designated office(s) or
department(s).
(2) Where proxies are solicited, the bank shall, within five
business days after the record date:
(i) Execute an omnibus proxy, including a power of substitution, in
favor of its respondent banks and forward such proxy to the registrant;
and
(ii) Furnish a notice to each respondent bank in whose favor an
omnibus proxy has been executed that it has executed such a proxy,
including a power of substitution, in its favor pursuant to paragraph
(b)(2)(i) of this section.
(3) Upon receipt of the proxy, other proxy soliciting material,
information statement, and/or annual reports to security holders, the
bank shall forward such materials to each beneficial owner on whose
behalf it holds securities, no later than five business days after the
date it receives such material and, where a proxy is solicited, the bank
shall forward, with the other proxy soliciting material and/or the
annual report, either:
(i) A properly executed proxy:
(A) Indicating the number of securities held for such beneficial
owner;
(B) Bearing the beneficial owner's account number or other form of
identification, together with instructions as to the procedures to vote
the securities;
(C) Briefly stating which other proxies, if any, are required to
permit securities to be voted under the terms of the instrument creating
that voting power or applicable state law; and
(D) Being accompanied by an envelope addressed to the registrant or
its agent, if not provided by the registrant; or
(ii) A request for voting instructions (for which registrant's form
of proxy may be used and which shall be voted by the record holder bank
or respondent bank in accordance with the instructions received),
together with an envelope addressed to the record holder bank or
respondent bank.
Note to paragraph (b)(3): At the request of a registrant, or on its
own initiative so long as the registrant does not object, a bank may,
but is not required to, deliver one annual report, proxy statement or
information statement to more than one beneficial owner sharing an
address if the requirements set forth in Sec. 240.14a-3(e)(1) (with
respect to annual reports and proxy statements) and Sec. 240.14c-3(c)
(with respect to annual reports and information statements) applicable
to registrants, with the exception of Sec. 240.14a-3(e)(1)(i)(E), are
satisfied instead by the bank.
(4) The bank shall:
(i) Respond, by first class mail or other equally prompt means,
directly to the registrant no later than one business day after the date
it receives an inquiry made in accordance with Sec. 240.14a-13(b)(1) or
Sec. 240.14c-7(b)(1) by indicating the name and address of each of its
respondent banks that holds the registrant's securities on behalf of
beneficial owners, if any;
(ii) Through its agent or directly, provide the registrant, upon the
registrant's request, and within the time specified in paragraph
(b)(4)(iii) of this section, with the names, addresses, and securities
position, compiled as of a date specified in the registrant's request
which is no earlier than five business days after the date the
registrant's request is received, of:
[[Page 216]]
(A) With respect to customer accounts opened on or before December
28, 1986, beneficial owners of the registrant's securities on whose
behalf it holds securities who have consented affirmatively to
disclosure of such information, subject to paragraph (b)(5) of this
section; and
(B) With respect to customer accounts opened after December 28,
1986, beneficial owners of the registrant's securities on whose behalf
it holds securities who have not objected to disclosure of such
information;
Provided, however, that if the record holder bank or respondent bank has
informed the registrant that a designated office(s) or department(s) is
to receive such requests, receipt for purposes of paragraphs (b)(4) (i)
and (ii) of this section shall mean receipt by such designated office(s)
or department(s); and
(iii) Through its agent or directly, transmit the data specified in
paragraph (b)(4)(ii) of this section to the registrant no later than
five business days after the date specified by the registrant.
Note 1: Where a record holder bank or respondent bank employs a
designated agent to act on its behalf in performing the obligations
imposed on it by paragraphs (b)(4) (ii) and (iii) of this section, the
five business day time period for determining the date as of which the
beneficial owner information is to be compiled is calculated from the
date the designated agent receives the registrant's request. In
complying with the registrant's request for beneficial owner information
under paragraphs (b)(4) (ii) and (iii) of this section, a record holder
bank or respondent bank need only supply the registrant with the names,
addresses and securities positions of affirmatively consenting and non-
objecting beneficial owners.
Note 2: If a record holder bank or respondent bank receives a
registrant's request less than five business days before the requested
compilation date, it must provide a list compiled as of a date that is
no more than five business days after receipt and transmit the list
within five business days after the compilation date.
(5) For customer accounts opened on or before December 28, 1986,
unless the bank has made a good faith effort to obtain affirmative
consent to disclosure of beneficial owner information pursuant to
paragraph (b)(4)(ii) of this section, the bank shall provide such
information as to beneficial owners who do not object to disclosure of
such information. A good faith effort to obtain affirmative consent to
disclosure of beneficial owner information shall include, but shall not
be limited to, making an inquiry:
(i) Phrased in neutral language, explaining the purpose of the
disclosure and the limitations on the registrant's use thereof;
(ii) Either in at least one mailing separate from other account
mailings or in repeated mailings; and
(iii) In a mailing that includes a return card, postage paid
enclosure.
(c) Exceptions to dissemination and beneficial owner information
requirements. The bank shall be subject to the following respect to its
dissemination and beneficial owner requirements.
(1) With regard to beneficial owners of exempt employee benefit plan
securities, the bank shall not:
(i) Include information in its response pursuant to paragraph (b)(1)
of this section; or forward proxies (or in lieu thereof requests for
voting instructions), proxy soliciting material, information statements,
or annual reports to security holders pursuant to paragraph (b)(3) of
this section to such beneficial owners; or
(ii) Include in its response pursuant to paragraphs (b)(4) and
(b)(5) of this section data concerning such beneficial owners.
(2) The bank need not satisfy:
(i) Its obligations under paragraphs (b)(2), (b)(3), and (b)(4) of
this section if a registrant does not provide assurance of reimbursement
of its reasonable expenses, both direct and indirect, incurred in
connection with performing the obligations imposed by paragraphs (b)(2),
(b)(3), and (b)(4) of this section; or
(ii) Its obligation under paragraph (b)(3) of this section to
forward annual reports to consenting and non-objecting beneficial owners
identified pursuant to paragraphs (b)(4) (ii) and (iii) of this section
if the registrant notifies the record holder bank or respondent bank,
pursuant to Sec. 240.14a-13(c) or Sec. 240.14c-7(c), that the
registrant will mail the annual report to beneficial
[[Page 217]]
owners whose names addresses and securities positions are disclosed
pursuant to paragraphs (b)(4) (ii) and (iii) of this section.
(3) For the purposes of determining the fees which may be charged to
registrants pursuant to Sec. 240.14a-13(b)(5), Sec. 240.14c-7(a)(5),
and paragraph (c)(2) of this section for performing obligations under
paragraphs (b)(2), (b)(3), and (b)(4) of this section, an amount no
greater than that permitted to be charged by brokers or dealers for
reimbursement of their reasonable expenses, both direct and indirect,
incurred in connection with performing the obligations imposed by
paragraphs (b)(2) and (b)(3) of Sec. 240.14b-1, shall be deemed to be
reasonable.
(4) In its response pursuant to paragraph (b)(1)(ii)(A) of this
section, a bank shall not include information about annual reports,
proxy statements or information statements that will not be delivered to
security holders sharing an address because of the bank's reliance on
the procedures referred to in the Note to paragraph (b)(3) of this
section.
[57 FR 1100, Jan. 10, 1992, as amended at 65 FR 65751, Nov. 2, 2000]
Regulation 14C: Distribution of Information Pursuant to Section 14(c)
ATTENTION ELECTRONIC FILERS
THIS REGULATION SHOULD BE READ IN CONJUNCTION WITH REGULATION S-T (PART
232 OF THIS CHAPTER), WHICH GOVERNS THE PREPARATION AND SUBMISSION OF
DOCUMENTS IN ELECTRONIC FORMAT. MANY PROVISIONS RELATING TO THE
PREPARATION AND SUBMISSION OF DOCUMENTS IN PAPER FORMAT CONTAINED IN
THIS REGULATION ARE SUPERSEDED BY THE PROVISIONS OF REGULATION S-T FOR
DOCUMENTS REQUIRED TO BE FILED IN ELECTRONIC FORMAT.
Sec. 240.14c-1 Definitions.
Unless the context otherwise requires, all terms used in this
regulation have the same meanings as in the Act or elsewhere in the
general rules and regulations thereunder. In addition, the following
definitions apply unless the context otherwise requires:
(a) Associate. The term ``associate,'' used to indicate a
relationship with any person, means:
(1) Any corporation or organization (other than the registrant or a
majority owned subsidiary of the registrant) of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner
of 10 percent or more of any class of equity securities;
(2) Any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a
similar fidiciary capacity; and
(3) Any relative or spouse of such person, or any relative of such
spouse, who has the same home as such person or who is a director or
officer of the registrant or any of its parents or subsidiaries.
(b) Employee benefit plan. For purposes of Sec. 240.14c-7, the term
``employee benefit plan'' means any purchase, savings, option, bonus,
appreciation, profit sharing, thrift, incentive, pension or similar plan
primarily for employees, directors, trustees or officers.
(c) Entity that exercises fiduciary powers. The term ``entity that
exercises fiduciary powers'' means any entity that holds securities in
nominee name or otherwise on behalf of a beneficial owner but does not
include a clearing agency registered pursuant to section 17A of the Act,
or a broker or a dealer.
(d) Exempt employee benefit plan securities. For purposes of Sec.
240.14c-7, the term ``exempt employee benefit plan securities'' means:
(1) Securities of the registrant held by an employee benefit plan,
as defined in paragraph (b) of this section, where such plan is
established by the registrant; or
(2) If notice regarding the current distribution of information
statements has been given pursuant to Sec. 240.14c-7(a)(1)(ii)(C) or if
notice regarding the current request for a list of names, addresses and
securities positions of beneficial owners has been given pursuant to
Sec. 240.14c-7(b)(3), securities of the registrant held by an employee
benefit plan, as defined in paragraph (b) of this section, where such
plan is established by an affiliate of the registrant.
(e) Information statement. The term ``information statement'' means
the
[[Page 218]]
statement required by Sec. 240.14c-2, whether or not contained in a
single document.
(f) Last fiscal year. The term ``last fiscal year'' of the
registrant means the last fiscal year of the registrant ending prior to
the date of the meeting with respect to which an information statement
is required to be distributed, or if the information statement involves
consents or authorizations in lieu of a meeting, the earliest date on
which they may be used to effect corporate action.
(g) Proxy. The term ``proxy'' includes every proxy, consent or
authorization within the meaning of section 14(a) of the Act. The
consent or authorization may take the form of failure to object or to
dissent.
(h) Record date. The term ``record date'' means the date as of which
the record holders of securities entitled to vote at a meeting or by
written consent or authorization shall be determined.
(i) Record holder. For purposes of Sec. 240.14c-7, the term
``record holder'' means any broker, dealer, voting trustee, bank,
association or other entity that exercises fiduciary powers which holds
securities of record in nominee name or otherwise or as a participant in
a clearing agency registered pursuant to section 17A of the Act.
(j) Registrant. The term ``registrant'' means:
(1) The issuer of a class of securities registered pursuant to
section 12 of the Act; or
(2) An investment company registered under the Investment Company
Act of 1940 that has made a public offering of its securities.
(k) Respondent bank. For purposes of Sec. 240.14c-7, the term
``respondent bank'' means any bank, association or other entity that
exercises fiduciary powers which holds securities on behalf of
beneficial owners and deposits such securities for safekeeping with
another bank, association or other entity that exercises fiduciary
powers.
[51 FR 44279, Dec. 9, 1986, as amended at 52 FR 23649, June 24, 1987; 53
FR 16406, May 9, 1988; 57 FR 1101, Jan. 10, 1992]
Sec. 240.14c-2 Distribution of information statement.
(a) In connection with every annual or other meeting of the holders
of the class of securities registered pursuant to section 12 of the Act
or of a class of securities issued by an investment company registered
under the Investment Company Act of 1940 that has made a public offering
of securities, including the taking of corporate action by the written
authorization or consent of security holders, the registrant shall
transmit a written information statement containing the information
specified in Schedule 14C (Sec. 240.14c-101) or written information
statements included in registration statements filed under the
Securities Act of 1933 on Form S-4 or F-4 (Sec. 239.25 or Sec. 239.34
of this chapter) or Form N-14 (Sec. 239.23 of this chapter), and
containing the information specified in such form, to every security
holder of the class that is entitled to vote or give an authorization or
consent in regard to any matter to be acted upon and from whom proxy
authorization or consent is not solicited on behalf of the registrant
pursuant to Section 14(a) of the Act, Provided however, That:
(1) In the case of a class of securities in unregistered or bearer
form, such statements need be transmitted only to those security holders
whose names are known to the registrant, and
(2) No such statements need to be transmitted to a security holder
if a registrant would be excused from delivery of an annual report or a
proxy statement under Rule 14a-3(e)(2) (Sec. 240.14a-3(e)(2)) if such
section were applicable.
(b) The information statement shall be sent or given at least 20
calendar days prior to the meeting date or, in the case of corporate
action taken pursuant to the consents or authorizations of security
holders, at least 20 calendar days prior to the earliest date on which
the corporate action may be taken.
(c) If a transaction is a roll-up transaction as defined in Item
901(c) of Regulation S-K (17 CFR 229.901(c)) and is registered (or
authorized to be registered) on Form S-4 (17 CFR 229.25) or Form F-4 (17
CFR 229.34), the information statement must be distributed to
[[Page 219]]
security holders no later than the lesser of 60 calendar days prior to
the date on which the meeting of security holders is held or action is
taken, or the maximum number of days permitted for giving notice under
applicable state law.
[51 FR 42070, Nov. 20, 1986, as amended at 56 FR 57254, Nov. 8, 1991; 57
FR 1102, Jan. 10, 1992; 57 FR 48295, Oct. 22, 1992]
Sec. 240.14c-3 Annual report to be furnished security holders.
(a) If the information statement relates to an annual (or special
meeting in lieu of the annual) meeting, or written consent in lieu of
such meeting, of security holders at which directors of the registrant,
other than an investment company registered under the Investment Company
Act of 1940, are to be elected, it shall be accompanied or preceded by
an annual report to security holders:
(1) The annual report shall contain the information specified in
paragraphs (b)(1) through (b)(11) of Rule 14a-3 (Sec. 240.14a-3 of this
chapter.)
(2) [Reserved]
Note to Small Business Issuers --In responding to the disclosure
items under paragraph (b) of Rule 14a-3, (Sec. 240.14a-3 of this
chapter) a ``small business issuer,'' defined under Rule 12b-2 of the
Exchange Act (Sec. 240.12b-2), shall refer to the disclosure items in
Regulation S-B (Sec. 228.10--702 of this chapter) rather than
Regulation S-K (Sec. 229.10--702 of this chapter). If there is no
comparable disclosure item in Regulation S-B, a small business issuer
need not provide the information requested. A small business issuer
shall provide the information in Item 310(a) of Regulation S-B in lieu
of the financial information required by Rule 14a-3(b)(1) (Sec.
240.14a-3(b)(1)). Small business issuers using the transitional small
business issuers disclosure format in the filing of their most recent
annual report on Form 10-KSB (Sec. 249.310b of this chapter) need not
provide the information required by paragraph (b) of Rule 14a-3. Rather,
those small business issuers shall provide only the financial statements
required to be filed in their most recent Form 10-KSB. The inclusion of
additional information, including information required of non-
transitional small business issuers, in the annual report to security
holders will not cause the issuer to be ineligible for the transitional
disclosure forms.
(b) Seven copies of the report sent to security holders pursuant to
this rule shall be mailed to the Commission, solely for its information,
not later than the date on which such report is first sent or given to
security holders or the date on which preliminary copies, or definitive
copies, if preliminary filing was not required, of the information
statement are filed with the Commission pursuant to Rule 14c-5,
whichever date is later. The report is not deemed to be ``filed'' with
the Commission or subject to this regulation otherwise than as provided
in this rule, or to the liabilities of section 18 of the Act, except to
the extent that the registrant specifically requests that it be treated
as a part of the information statement or incorporates it in the
information statement or other filed report by reference.
(c) A registrant will be considered to have delivered an annual
report or information statement to security holders of record who share
an address if the requirements set forth in Sec. 240.14a-3(e)(1) are
satisfied with respect to the annual report or information statement, as
applicable.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 12, 13, 14,
15(d), 23(a), 48 Stat. 892, 894, 901; secs. 205, 209, 48 Stat. 906, 908;
sec. 203(a), 49 Stat. 704; secs. 1, 3, 8, 49 Stat. 1375, 1377, 1379;
sec. 301, 54 Stat. 857; secs. 8, 202, 68 Stat. 685, 686; secs. 3, 4, 5,
6, 78 Stat. 565-568, 569, 570-574; sec. 1, 79 Stat. 1051; secs. 1, 2, 3,
82 Stat. 454, 455; secs. 1, 2, 3-5, 28(c), 84 Stat. 1435, 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 11, 18, 89 Stat. 117, 118, 119,
121, 155; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l, 78m, 78n, 78l(d),
78w(a))
[39 FR 40770, Nov. 20, 1974, as amended at 45 FR 63647, Sept. 25, 1980;
51 FR 42071, Nov. 20, 1986; 52 FR 48984, Dec. 29, 1987; 58 FR 26519, May
4, 1993; 59 FR 52700, Oct. 19, 1994; 59 FR 67765, Dec. 30, 1994; 64 FR
62547, Nov. 16, 1999; 65 FR 65751, Nov. 2, 2000]
Sec. 240.14c-4 Presentation of information in information statement.
(a) The information included in the information statement shall be
clearly presented and the statements made shall be divided into groups
according to subject matter and the various groups of statements shall
be preceded by appropriate headings. The order of items and sub-items in
the schedule need not be followed. Where practicable and appropriate,
the information shall be presented in tabular form.
[[Page 220]]
All amounts shall be stated in figures. Information required by more
than one applicable item need not be repeated. No statement need be made
in response to any item or sub-item which is inapplicable.
(b) Any information required to be included in the information
statement as to terms of securities or other subject matters which from
a standpoint of practical necessity must be determined in the future may
be stated in terms of present knowledge and intention. Subject to the
foregoing, information which is not known to the registrant and which it
is not reasonably within the power of the registrant to ascertain or
procure may be omitted, if a brief statement of the circumstances
rendering such information unavailable is made.
(c) All printed information statements shall be in roman type at
least as large and as legible as 10-point modern type except that to the
extent necessary for convenient presentation, financial statements and
other tabular data, but not the notes thereto, may be in roman type at
least as large and as legible as 8-point modern type. All such type
shall be leaded at least 2 points.
(d) Where an information statement is delivered through an
electronic medium, issuers may satisfy legibility requirements
applicable to printed documents, such as type size and font, by
presenting all required information in a format readily communicated to
investors.
[31 FR 262, Jan. 8, 1966, as amended at 36 FR 8935, May 15, 1971; 51 FR
42071, Nov. 20, 1986; 61 FR 24657, May 15, 1996]
Sec. 240.14c-5 Filing requirements.
(a) Preliminary information statement. Five preliminary copies of
the information statement shall be filed with the Commission at least 10
calendar days prior to the date definitive copies of such statement are
first sent or given to security holders, or such shorter period prior to
that date as the Commission may authorize upon a showing of good cause
therefor. In computing the 10-day period, the filing date of the
preliminary copies is to be counted as the first day and the 11th day is
the date on which definitive copies of the information statement may be
mailed to security holders. A registrant, however, shall not file with
the Commission a preliminary information statement if it relates to an
annual (or special meeting in lieu of the annual) meeting, of security
holders at which the only matters to be acted upon are:
(1) The election of directors;
(2) The election, approval or ratification of accountant(s);
(3) A security holder proposal identified in the registrant's
information statement pursuant to Item 4 of Schedule 14C (Sec. 240.14c-
101); and/or
(4) The approval or ratification of a plan as defined in paragraph
(a)(7)(ii) of Item 402 of Regulation S-K (Sec. 229.402(a)(7)(ii) of
this chapter) or amendments to such a plan.
This exclusion from filing a preliminary information statement does not
apply if the registrant comments upon or refers to a solicitation in
opposition in connection with the meeting in its information statement.
Note 1: The filing of revised material does not recommence the ten
day time period unless the revised material contains material revisions
or material new proposal(s) that constitute a fundamental change in the
information statement.
Note 2: The officials responsible for the preparation of the
information statement should make every effort to verify the accuracy
and completeness of the information required by the applicable rules.
The preliminary statement should be filed with the Commission at the
earliest practicable date.
Note 3: Solicitation in Opposition--For purposes of the exclusion
from filing a preliminary information statement, a ``solicitation in
opposition'' includes: (a) Any solicitation opposing a proposal
supported by the registrant; and (b) any solicitation supporting a
proposal that the registrant does not expressly support, other than a
security holder proposal identified in the registrant's information
statement pursuant to Item 4 of Schedule 14C (Sec. 240.14c-101 of this
chapter). The identification of a security holder proposal in the
registrant's information statement does not constitute a ``solicitation
in opposition,'' even if the registrant opposes the proposal and/or
includes a statement in opposition to the proposal.
Note 4: A registrant that is filing an information statement in
preliminary form only because the registrant has commented on or
referred to an opposing solicitation should indicate that fact in a
transmittal letter when filing the preliminary material with the
Commission.
[[Page 221]]
(b) Definitive information statement. Eight definitive copies of the
information statement, in the form in which it is furnished to security
holders, must be filed with the Commission no later than the date the
information statement is first sent or given to security holders. Three
copies of these materials also must be filed with, or mailed for filing
to, each national securities exchange on which the registrant has a
class of securities listed and registered.
(c) Release dates. All preliminary material filed pursuant to
paragraph (a) of this section shall be accompanied by a statement of the
date on which copies thereof filed pursuant to paragraph (b) of this
section are intended to be released to security holders. All definitive
material filed pursuant to paragraph (b) of this section shall be
accompanied by a statement of the date on which copies of such material
have been released to security holders or, if not released, the date on
which copies thereof are intended to be released.
(d)(1) Public availability of information. All copies of material
filed pursuant to paragraph (a) of this section shall be clearly marked
``Preliminary Copies,'' and shall be deemed immediately available for
public inspection unless confidential treatment is obtained pursuant to
paragraph (d)(2) of this section.
(2) Confidential treatment. If action will be taken on any matter
specified in Item 14 of Schedule 14A (Sec. 240.14a-101), all copies of
the preliminary information statement filed under paragraph (a) of this
section will be for the information of the Commission only and will not
be deemed available for public inspection until filed with the
Commission in definitive form so long as:
(i) The information statement does not relate to a matter or
proposal subject to Sec. 240.13e-3 or a roll-up transaction as defined
in Item 901(c) of Regulation S-K (Sec. 229.901(c) of this chapter);
(ii) Neither the parties to the transaction nor any persons
authorized to act on their behalf have made any public communications
relating to the transaction except for statements where the content is
limited to the information specified in Sec. 230.135 of this chapter;
and
(iii) The materials are filed in paper and marked ``Confidential,
For Use of the Commission Only''. In all cases, the materials may be
disclosed to any department or agency of the United States Government
and to the Congress, and the Commission may make any inquiries or
investigation into the materials as may be necessary to conduct an
adequate review by the Commission.
Instruction to paragraph (d)(2): If communications are made publicly
that go beyond the information specified in Sec. 230.135, the materials
must be re-filed publicly with the Commission.
(e) Revised information statements. Where any information statement
filed pursuant to this section is amended or revised, two of the copies
of such amended or revised material filed pursuant to this section shall
be marked to indicate clearly and precisely the changes effected
therein. If the amendment or revision alters the text of the material,
the changes in such text shall be indicated by means of underscoring or
in some other appropriate manner.
(f) Merger material. Notwithstanding the foregoing provisions of
this section, any information statement or other material included in a
registration statement filed under the Securities Act of 1933 on Form N-
14, S-4, or F-4 (Sec. 239.23, Sec. 239.25 or Sec. 239.34 of this
chapter) shall be deemed filed both for the purposes of that Act and for
the purposes of this section, but separate copies of such material need
not be furnished pursuant to this section, nor shall any fee be required
under paragraph (a) of this section. However, any additional material
used after the effective date of the registration statement on Form N-
14, S-4, or F-4 shall be filed in accordance with this section, unless
separate copies of such material are required to be filed as an
amendment of such registration statement.
(g) Fees. At the time of filing a preliminary information statement
regarding an acquisition, merger, spinoff, consolidation or proposed
sale or other disposition of substantially all the assets of the
company, the registrant shall pay the Commission a fee, no part of which
shall be refunded, established in accordance with Sec. 240.0-11.
[[Page 222]]
(h) Cover page. Each information statement filed with the Commission
shall include a cover page in the form set forth in Schedule 14C (Sec.
240.14c-101). The cover page required by this paragraph need not be
distributed to security holders.
[51 FR 42071, Nov. 20, 1986, as amended at 52 FR 48984, Dec. 29, 1987;
57 FR 48295, Oct. 22, 1992; 58 FR 14684, Mar. 18, 1993; 58 FR 69226,
Dec. 30, 1993; 59 FR 67765, Dec. 30, 1994; 61 FR 49960, Sept. 24, 1996;
64 FR 61459, Nov. 10, 1999]
Sec. 240.14c-6 False or misleading statements.
(a) No information statement shall contain any statement which, at
the time and in the light of the circumstances under which it is made,
is false or misleading with respect to any material fact, or which omits
to state any material fact necessary in order to make the statements
therein not false or misleading or necessary to correct any statement in
any earlier communication with respect to the same meeting or subject
matter which has become false or misleading.
(b) The fact that an information statement has been filed with or
examined by the Commission shall not be deemed a finding by the
Commission that such material is accurate or complete or not false or
misleading, or that the Commission has passed upon the merits of or
approved any statement contained therein or any matter to be acted upon
by security holders. No representation contrary to the foregoing shall
be made.
[31 FR 262, Jan. 8, 1966]
Sec. 240.14c-7 Providing copies of material for certain beneficial
owners.
(a) If the registrant knows that securities of any class entitled to
vote at a meeting, or by written authorizations or consents if no
meeting is held, are held of record by a broker, dealer, voting trustee,
or bank, association, or other entity that exercises fiduciary powers in
nominee name or otherwise, the registrant shall:
(1) By first class mail or other equally prompt means:
(i) Inquire of each such record holder:
(A) Whether other persons are the beneficial owners of such
securities and, if so, the number of copies of the information statement
necessary to supply such material to such beneficial owners;
(B) In the case of an annual (or special meeting in lieu of the
annual) meeting, or written consents in lieu of such meeting, at which
directors are to be elected, the number of copies of the annual report
to security holders, necessary to supply such report to such beneficial
owners for whom proxy material has not been and is not to be made
available and to whom such reports are to be distributed by such record
holder or its nominee and not by the registrant;
(C) If the record holder or respondent bank has an obligation under
Sec. 240.14b-1(b)(3) or Sec. 240.14b-2(b)(4) (ii) and (iii), whether
an agent has been designated to act on its behalf in fulfilling such
obligation, and, if so, the name and address of such agent; and
(D) Whether it holds the registrant's securities on behalf of any
respondent bank and, if so, the name and address of each such respondent
bank; and
(ii) Indicate to each such record holder:
(A) Whether the registrant pursuant to paragraph (c) of this
section, intends to distribute the annual report to security holders to
beneficial owners of its securities whose names, addresses and
securities positions are disclosed pursuant to Sec. 240.14b-1(b)(3) and
Sec. 240.14b-2(b)(4) (ii) and (iii);
(B) The record date; and
(C) At the option of the registrant, any employee benefit plan
established by an affiliate of the registrant that holds securities of
the registrant that the registrant elects to treat as exempt employee
benefit plan securities;
(2) Upon receipt of a record holder's or respondent bank's response
indicating, pursuant to Sec. 240.14b-2(a)(1), the names and addresses
of its respondent banks, within one business day after the date such
response is received, make an inquiry of and give notification to each
such respondent bank in the same manner required by paragraph (a)(1) of
this section; Provided, however, the inquiry required by paragraphs
(a)(1) and (a)(2) of this section shall not cover beneficial owners of
exempt employee benefit plan securities;
[[Page 223]]
(3) Make the inquiry required by paragraph (a)(1) of this section on
the earlier of:
(i) At least 20 business days prior to the record date of the
meeting of security holders or the record date of written consents in
lieu of a meeting; or
(ii) At least 20 business days prior to the date the information
statement is required to be sent or given pursuant to Sec. 240.14c-
2(b);
Provided, however, That, if a record holder or respondent bank has
informed the registrant that a designated office(s) or department(s) is
to receive such inquiries, the inquiry shall be made to such designated
office(s) or department(s);
(4) Supply, in a timely manner, each record holder and respondent
bank of whom the inquiries required by paragraphs (a)(1) and (a)(2) of
this section are made with copies of the information statement and/or
the annual report to security holders, in such quantities, assembled in
such form and at such place(s), as the record holder or respondent bank
may reasonably request in order to send such material to each beneficial
owner of securities who is to be furnished with such material by the
record holder or respondent bank; and
(5) Upon the request of any record holder or respondent bank that is
supplied with information statements and/or annual reports to security
holders pursuant to paragraph (a)(3) of this section, pay its reasonable
expenses for completing the mailing of such material to beneficial
owners.
Note 1: If the registrant's list of security holders indicates that
some of its securities are registered in the name of a clearing agency
registered pursuant to section 17A of the Act (e.g., ``Cede & Co.,''
nominee for the Depository Trust Company), the registrant shall make
appropriate inquiry of the clearing agency and thereafter of the
participants in such clearing agency who may hold on behalf of a
beneficial owner or respondent bank, and shall comply with the above
paragraph with respect to any such participant (see Sec. 240.14c-1
(h)).
Note 2: The attention of registrants is called to the fact that each
broker, dealer, bank, association, and other entity that exercises
fiduciary powers has an obligation pursuant to Sec. 240.14b-1 and Sec.
240.14b-2 (except as provided therein with respect to exempt employee
benefit plan securities held in nominee name) and, with respect to
brokers and dealers, applicable self-regulatory organization
requirements to obtain and forward, within the time periods prescribed
therein, (a) information statements to beneficial owners on whose behalf
it holds securities, and (b) annual reports to security holders to
beneficial owners on whose behalf it holds securities, unless the
registrant has notified the record holder or respondent bank that it has
assumed responsibility to mail such material to beneficial owners whose
names, addresses, and securities positions are disclosed pursuant to
Sec. 240.14b-1(b)(3) and Sec. 240.14b-2(b)(4) (ii) and (iii).
Note 3: The attention of registrants is called to the fact that
registrants have an obligation, pursuant to paragraph (d) of this
section, to cause information statements and annual reports to security
holders to be furnished, in accordance with Sec. 240.14c-2, to
beneficial owners of exempt employee benefit plan securities.
(b) Any registrant requesting pursuant to Sec. 240.14b-1(b)(3) and
Sec. 240.14b-2(b)(4) (ii) and (iii) a list of names, addresses and
securities positions of beneficial owners of its securities who either
have consented or have not objected to disclosure of such information
shall:
(1) By first class mail or other equally prompt means, inquire of
each record holder and each respondent bank identified to the registrant
pursuant to Sec. 240.14b-2(e)(1) whether such record holder or
respondent bank holds the registrant's securities on behalf of any
respondent banks and, if so, the name and address of each such
respondent bank;
(2) Request such list be compiled as of a date no earlier than five
business days after the date the registant's request is received by the
record holder or respondent bank; Provided, however, That if the record
holder or respondent bank has informed the registrant that a designated
office(s) or department(s) is to receive such requests, the request
shall be made to such designated office(s) or department(s);
(3) Make such request to the following persons that hold the
registrant's securities on behalf of beneficial owners: all brokers,
dealers, banks, associations and other entities that exercise fiduciary
powers; Provided, however, such request shall not
[[Page 224]]
cover beneficial owners of exempt employee benefit plan securities as
defined in Sec. 240.14a-1(d)(1); and, at the option of the registrant,
such request may give notice of any employee benefit plan established by
an affiliate of the registrant that holds securities of the registrant
that the registrant elects to treat as exempt employee benefit plan
securities;
(4) Use the information furnished in response to such request
exclusively for purposes of corporate communications; and
(5) Upon the request of any record holder or respondent bank to whom
such request is made, pay the reasonable expenses, both direct and
indirect, of providing beneficial owner information.
Note: A registrant will be deemed to have satisfied its obligations
under paragraph (b) of this section by requesting consenting and non-
objecting beneficial owner lists from a designated agent acting on
behalf of the record holder or respondent bank and paying to that
designated agent the reasonable expenses of providing the beneficial
owner information.
(c) A registrant, at its option, may send by mail or other equally
prompt means, its annual report to security holders to the beneficial
owners whose identifying information is provided by record holders and
respondent banks, pursuant to Sec. 240.14b-1(b)(3) and Sec. 240.14b-
2(b)(4) (ii) and (iii), provided that such registrant notifies the
record holders and respondent banks at the time it makes the inquiry
required by paragraph (a) of this section that the registrant will send
the annual report to security holders to the beneficial owners so
identified.
(d) If a registrant furnishes information statements to record
holders and respondent banks who hold securities on behalf of beneficial
owners, the registrant shall cause information statements and annual
reports to security holders to be furnished, in accordance with Sec.
240.14c-2, to beneficial owners of exempt employee benefit plan
securities.
[51 FR 44280, Dec. 9, 1986, as amended at 52 FR 23649, June 24, 1987; 53
FR 16406, May 9, 1988; 57 FR 1102, Jan. 10, 1992; 61 FR 24657, May 15,
1996; 64 FR 62547, Nov. 16, 1999]
Sec. 240.14c-101 Schedule 14C. Information required in information
statement.
Schedule 14C Information
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[ ] Definitive Information Statement
________________________________________________________________________
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
Note
Note: Where any item, other than Item 4, calls for information with
respect to any matter to be acted upon at the meeting or, if no meeting
is being held, by written authorization or consent, such item need be
answered only with respect to proposals to be
[[Page 225]]
made by the registrant. Registrants and acquirees that meet the
definition of ``small business issuer'' under Rule 12b-2 of the Exchange
Act (Sec. 240.12b-2) shall refer to the disclosure items in Regulation
S-B (Sec. 228.10 et seq. of this chapter) and not Regulation S-K (Sec.
229.10 et seq. of this chapter). If there is no comparable disclosure
item in Regulation S-B, small business issuers need not provide the
information requested. Small business issuers shall provide the
financial information in Item 310 of Regulation S-B in lieu of any
financial statements required by Item 1 of Sec. 240.14c-101.
Item 1. Information required by Items of Schedule 14A (17 CFR
240.14a-101). Furnish the information called for by all of the items of
Schedule 14A of Regulation 14A (17 CFR 240.14a-101) (other than Items
1(c). 2, 4 and 5 thereof) which would be applicable to any matter to be
acted upon at the meeting if proxies were to be solicited in connection
with the meeting. Notes A, C, D, and E to Schedule 14A are also
applicable to Schedule 14C.
Item 2. Statement that proxies are not solicited. The following
statement shall be set forth on the first page of the information
statement in bold-face type:
We Are Not Asking You for a Proxy and You are Requested Not To Send Us a
Proxy
Item 3. Interest of certain persons in or opposition to matters to
be acted upon. (a) Describe briefly any substantial interest, direct or
indirect, by security holdings or otherwise, of each of the following
persons in any matter to be acted upon, other than elections to office:
(1) Each person who has been a director or officer of the registrant
at any time since the beginning of the last fiscal year;
(2) Each nominee for election as a director of the registrant;
(3) Each associate of any of the foregoing persons.
(b) Give the name of any director of the registrant who has informed
the registrant in writing that he intends to oppose any action to be
taken by the registrant at the meeting and indicate the action which he
intends to oppose.
Item 4. Proposals by security holders. If any security holder
entitled to vote at the meeting or by written authorization or consent
has submitted to the registrant a reasonable time before the information
statement is to be transmitted to security holders a proposal, other
than elections to office, which is accompanied by notice of his
intention to present the proposal for action at the meeting the
registrant shall, if a meeting is held, make a statement to that effect,
identify the proposal and indicate the disposition proposed to be made
of the proposal by the registrant at the meeting.
Instructions. 1. This item need not be answered as to any proposal
submitted with respect to an annual meeting if such proposal is
submitted less than 60 days in advance of a day corresponding to the
date of mailing a proxy statement or information statement in connection
with the last annual meeting of security holders.
2. If the registrant intends to rule a proposal out of order, the
Commission shall be so advised 20 calendar days prior to the date the
definitive copies of the information statement are filed with the
Commission, together with a statement of the reasons why the proposal is
not deemed to be a proper subject for action by security holders.
Item 5. Delivery of documents to security holders sharing an
address. If one annual report or information statement is being
delivered to two or more security holders who share an address, furnish
the following information in accordance with Sec. 240.14a-3(e)(1):
(a) State that only one annual report or information statement, as
applicable, is being delivered to multiple security holders sharing an
address unless the registrant has received contrary instructions from
one or more of the security holders;
(b) Undertake to deliver promptly upon written or oral request a
separate copy of the annual report or information statement, as
applicable, to a security holder at a shared address to which a single
copy of the documents was delivered and provide instructions as to how a
security holder can notify the registrant that the security holder
wishes to receive a separate copy of an annual report or information
statement, as applicable;
(c) Provide the phone number and mailing address to which a security
holder can direct a notification to the registrant that the security
holder wishes to receive a separate annual report or proxy statement, as
applicable, in the future; and
(d) Provide instructions how security holders sharing an address can
request delivery of a single copy of annual reports or information
statements if they are receiving multiple copies of annual reports or
information statements.
[51 FR 42072, Nov. 20, 1986, as amended at 52 FR 48984, Dec. 29, 1987;
57 FR 36495, Aug. 13, 1992; 58 FR 14684, Mar. 18, 1993; 59 FR 67765,
Dec. 30, 1994; 61 FR 49960, Sept. 24, 1996; 65 FR 65752, Nov. 2, 2000]
[[Page 226]]
Regulation 14D
ATTENTION ELECTRONIC FILERS
THIS REGULATION SHOULD BE READ IN CONJUNCTION WITH REGULATION S-T (PART
232 OF THIS CHAPTER), WHICH GOVERNS THE PREPARATION AND SUBMISSION OF
DOCUMENTS IN ELECTRONIC FORMAT. MANY PROVISIONS RELATING TO THE
PREPARATION AND SUBMISSION OF DOCUMENTS IN PAPER FORMAT CONTAINED IN
THIS REGULATION ARE SUPERSEDED BY THE PROVISIONS OF REGULATION S-T FOR
DOCUMENTS REQUIRED TO BE FILED IN ELECTRONIC FORMAT.
Sec. 240.14d-1 Scope of and definitions applicable to Regulations 14D
and 14E.
(a) Scope. Regulation 14D (Sec. Sec. 240.14d-1 through 240.14d-101)
shall apply to any tender offer which is subject to section 14(d)(1) of
the Act, including, but not limited to, any tender offer for securities
of a class described in that section which is made by an affiliate of
the issuer of such class. Regulation 14E (Sec. Sec. 240.14e-1 and
240.14e-2) shall apply to any tender offer for securities (other than
exempted securities) unless otherwise noted therein.
(b) The requirements imposed by sections 14(d)(1) through 14(d)(7)
of the Act, Regulation 14D and Schedules TO and 14D-9 thereunder, and
Rule 14e-1 of Regulation 14E under the Act, shall be deemed satisfied
with respect to any tender offer, including any exchange offer, for the
securities of an issuer incorporated or organized under the laws of
Canada or any Canadian province or territory, if such issuer is a
foreign private issuer and is not an investment company registered or
required to be registered under the Investment Company Act of 1940, if
less than 40 percent of the class of securities outstanding that is the
subject of the tender offer is held by U.S. holders, and the tender
offer is subject to, and the bidder complies with, the laws, regulations
and policies of Canada and/or any of its provinces or territories
governing the conduct of the offer (unless the bidder has received an
exemption(s) from, and the tender offer does not comply with,
requirements that otherwise would be prescribed by Regulation 14D or
14E), provided that:
(1) In the case of tender offers subject to section 14(d)(1) of the
Act, where the consideration for a tender offer subject to this section
consists solely of cash, the entire disclosure document or documents
required to be furnished to holders of the class of securities to be
acquired shall be filed with the Commission on Schedule 14D-1F (Sec.
240.14d-102) and disseminated to shareholders of the subject company
residing in the United States in accordance with such Canadian laws,
regulations and policies; or
(2) Where the consideration for a tender offer subject to this
section includes securities of the bidder to be issued pursuant to the
offer, any registration statement and/or prospectus relating thereto
shall be filed with the Commission along with the Schedule 14D-1F
referred to in paragraph (b)(1) of this section, and shall be
disseminated, together with the home jurisdiction document(s)
accompanying such Schedule, to shareholders of the subject company
residing in the United States in accordance with such Canadian laws,
regulations and policies.
Notes: 1. For purposes of any tender offer, including any exchange
offer, otherwise eligible to proceed in accordance with Rule 14d-1(b)
under the Act, the issuer of the subject securities will be presumed to
be a foreign private issuer and U.S. holders will be presumed to hold
less than 40 percent of such outstanding securities, unless (a) the
aggregate trading volume of that class on national securities exchanges
in the United States and on NASDAQ exceeded its aggregate trading volume
on securities exchanges in Canada and on the Canadian Dealing Network,
Inc. (``CDN'') over the 12 calendar month period prior to commencement
of this offer, or if commenced in response to a prior offer, over the 12
calendar month period prior to the commencement of the initial offer
(based on volume figures published by such exchanges and NASDAQ and
CDN); (b) the most recent annual report or annual information form filed
or submitted by the issuer with securities regulators of Ontario,
Quebec, British Columbia or Alberta (or, if the issuer of the subject
securities is not a reporting issuer in any of such provinces, with any
other Canadian securities regulator) or with the Commission indicates
that U.S. holders hold 40 percent or more of the outstanding subject
class of securities; or (c) the offeror has actual knowledge that the
level of U.S. ownership equals or exceeds 40 percent of such securities.
[[Page 227]]
2. Notwithstanding the grant of an exemption from one or more of the
applicable Canadian regulatory provisions imposing requirements that
otherwise would be prescribed by Regulation 14D or 14E, the tender offer
will be eligible to proceed in accordance with the requirements of this
section if the Commission by order determines that the applicable
Canadian regulatory provisions are adequate to protect the interest of
investors.
(c) Tier I. Any tender offer for the securities of a foreign private
issuer as defined in Sec. 240.3b-4 is exempt from the requirements of
sections 14(d)(1) through 14(d)(7) of the Act (15 U.S.C. 78n(d)(1)
through 78n(d)(7)), Regulation 14D (Sec. Sec. 240.14d-1 through
240.14d-10) and Schedules TO (Sec. 240.14d-100) and 14D-9 (Sec.
240.14d-101) thereunder, and Sec. 240.14e-1 and Sec. 240.14e-2 of
Regulation 14E under the Act if the following conditions are satisfied:
(1) U.S. ownership limitation. Except in the case of a tender offer
which is commenced during the pendency of a tender offer made by a prior
bidder in reliance on this paragraph or Sec. 240.13e-4(h)(8), U.S.
holders do not hold more than 10 percent of the class of securities
sought in the offer (as determined under Instruction 2 to paragraphs (c)
and (d) of this section).
(2) Equal treatment. The bidder must permit U.S. holders to
participate in the offer on terms at least as favorable as those offered
any other holder of the same class of securities that is the subject of
the tender offer; however:
(i) Registered exchange offers. If the bidder offers securities
registered under the Securities Act of 1933 (15 U.S.C. 77a et seq.), the
bidder need not extend the offer to security holders in those states or
jurisdictions that prohibit the offer or sale of the securities after
the bidder has made a good faith effort to register or qualify the offer
and sale of securities in that state or jurisdiction, except that the
bidder must offer the same cash alternative to security holders in any
such state or jurisdiction that it has offered to security holders in
any other state or jurisdiction.
(ii) Exempt exchange offers. If the bidder offers securities exempt
from registration under Sec. 230.802 of this chapter, the bidder need
not extend the offer to security holders in those states or
jurisdictions that require registration or qualification, except that
the bidder must offer the same cash alternative to security holders in
any such state or jurisdiction that it has offered to security holders
in any other state or jurisdiction.
(iii) Cash only consideration. The bidder may offer U.S. holders
only a cash consideration for the tender of the subject securities,
notwithstanding the fact that the bidder is offering security holders
outside the United States a consideration that consists in whole or in
part of securities of the bidder, so long as the bidder has a reasonable
basis for believing that the amount of cash is substantially equivalent
to the value of the consideration offered to non-U.S. holders, and
either of the following conditions are satisfied:
(A) The offered security is a ``margin security'' within the meaning
of Regulation T (12 CFR 220.2) and the issuer undertakes to provide,
upon the request of any U.S. holder or the Commission staff, the closing
price and daily trading volume of the security on the principal trading
market for the security as of the last trading day of each of the six
months preceding the announcement of the offer and each of the trading
days thereafter; or
(B) If the offered security is not a ``margin security'' within the
meaning of Regulation T (12 CFR 220.2) the issuer undertakes to provide,
upon the request of any U.S. holder or the Commission staff, an opinion
of an independent expert stating that the cash consideration offered to
U.S. holders is substantially equivalent to the value of the
consideration offered security holders outside the United States.
(iv) Disparate tax treatment. If the bidder offers loan notes solely
to offer sellers tax advantages not available in the United States and
these notes are neither listed on any organized securities market nor
registered under the Securities Act of 1933 (15 U.S.C. 77a et seq.), the
loan notes need not be offered to U.S. holders.
(3) Informational documents. (i) The bidder must disseminate any
informational document to U.S. holders, including any amendments
thereto, in English, on a comparable basis to that provided to security
holders in the home jurisdiction.
[[Page 228]]
(ii) If the bidder disseminates by publication in its home
jurisdiction, the bidder must publish the information in the United
States in a manner reasonably calculated to inform U.S. holders of the
offer.
(iii) In the case of tender offers for securities described in
section 14(d)(1) of the Act (15 U.S.C. 78n(d)(1)), if the bidder
publishes or otherwise disseminates an informational document to the
holders of the securities in connection with the tender offer, the
bidder must furnish that informational document, including any
amendments thereto, in English, to the Commission on Form CB (Sec.
249.480 of this chapter) by the first business day after publication or
dissemination. If the bidder is a foreign company, it must also file a
Form F-X (Sec. 239.42 of this chapter) with the Commission at the same
time as the submission of Form CB to appoint an agent for service in the
United States.
(4) Investment companies. The issuer of the securities that are the
subject of the tender offer is not an investment company registered or
required to be registered under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.), other than a registered closed-end investment
company.
(d) Tier II. A person conducting a tender offer (including any
exchange offer) that meets the conditions in paragraph (d)(1) of this
section shall be entitled to the exemptive relief specified in paragraph
(d)(2) of this section provided that such tender offer complies with all
the requirements of this section other than those for which an exemption
has been specifically provided in paragraph (d)(2) of this section:
(1) Conditions. (i) The subject company is a foreign private issuer
as defined in Sec. 240.3b-4 and is not an investment company registered
or required to be registered under the Investment Company Act of 1940
(15 U.S.C. 80a-1 et seq.), other than a registered closed-end investment
company;
(ii) Except in the case of a tender offer which is commenced during
the pendency of a tender offer made by a prior bidder in reliance on
this paragraph or Sec. 240.13e-4(i), U.S. holders do not hold more than
40 percent of the class of securities sought in the offer (as determined
under Instruction 2 to paragraphs (c) and (d) of this section); and
(iii) The bidder complies with all applicable U.S. tender offer laws
and regulations, other than those for which an exemption has been
provided for in paragraph (d)(2) of this section.
(2) Exemptions--i) Equal treatment--loan notes. If the bidder offers
loan notes solely to offer sellers tax advantages not available in the
United States and these notes are neither listed on any organized
securities market nor registered under the Securities Act of 1933 (15
U.S.C. 77a et seq.), the loan notes need not be offered to U.S. holders,
notwithstanding Sec. 240.14d-10.
(ii) Equal treatment--separate U.S. and foreign offers.
Notwithstanding the provisions of Sec. 240.14d-10, a bidder conducting
a tender offer meeting the conditions of paragraph (d)(1) of this
section may separate the offer into two offers: one offer made only to
U.S. holders and another offer made only to non-U.S. holders. The offer
to U.S. holders must be made on terms at least as favorable as those
offered any other holder of the same class of securities that is the
subject of the tender offers.
(iii) Notice of extensions. Notice of extensions made in accordance
with the requirements of the home jurisdiction law or practice will
satisfy the requirements of Sec. 240.14e-1(d).
(iv) Prompt payment. Payment made in accordance with the
requirements of the home jurisdiction law or practice will satisfy the
requirements of Sec. 240.14e-1(c).
(v) Subsequent offering period/Withdrawal rights. A bidder will
satisfy the announcement and prompt payment requirements of Sec.
240.14d-11(d), if the bidder announces the results of the tender offer,
including the approximate number of securities deposited to date, and
pays for tendered securities in accordance with the requirements of the
home jurisdiction law or practice and the subsequent offering period
commences immediately following such announcement. Notwithstanding
section 14(d)(5) of the Act (15 U.S.C. 78n(d)(5)), the bidder need not
extend withdrawal rights following the close of the offer and prior to
the commencement of the subsequent offering period.
[[Page 229]]
Instructions to paragraphs (c) and (d):
1. Home jurisdiction means both the jurisdiction of the subject
company's incorporation, organization or chartering and the principal
foreign market where the subject company's securities are listed or
quoted.
2. U.S. holder means any security holder resident in the United
States. Except as otherwise provided in Instruction 3 below, to
determine the percentage of outstanding securities held by U.S. holders:
i. Calculate the U.S. ownership as of 30 days before the
commencement of the tender offer;
ii. Include securities underlying American Depositary Shares
convertible or exchangeable into the securities that are the subject of
the tender offer when calculating the number of subject securities
outstanding, as well as the number held by U.S. holders. Exclude from
the calculations other types of securities that are convertible or
exchangeable into the securities that are the subject of the tender
offer, such as warrants, options and convertible securities. Exclude
from those calculations securities held by persons who hold more than 10
percent of the subject securities, or that are held by the bidder;
iii. Use the method of calculating record ownership in Rule 12g3-
2(a) under the Act (Sec. 240.12g3-2(a) of this chapter), except that
your inquiry as to the amount of securities represented by accounts of
customers resident in the United States may be limited to brokers,
dealers, banks and other nominees located in the United States, the
subject company's jurisdiction of incorporation or that of each
participant in a business combination, and the jurisdiction that is the
primary trading market for the subject securities, if different than the
subject company's jurisdiction of incorporation;
iv. If, after reasonable inquiry, you are unable to obtain
information about the amount of securities represented by accounts of
customers resident in the United States, you may assume, for purposes of
this definition, that the customers are residents of the jurisdiction in
which the nominee has its principal place of business; and
v. Count securities as beneficially owned by residents of the United
States as reported on reports of beneficial ownership that are provided
to you or publicly filed and based on information otherwise provided to
you.
3. In a tender offer by a bidder other than an affiliate of the
issuer of the subject securities, the issuer of the subject securities
will be presumed to be a foreign private issuer and U.S. holders will be
presumed to hold 10 percent or less (40 percent or less in the case of
14d-1(d)) of such outstanding securities, unless:
i. The tender offer is made pursuant to an agreement with the issuer
of the subject securities;
ii. The aggregate trading volume of the subject class of securities
on all national securities exchanges in the United States, on the Nasdaq
market, or on the OTC market, as reported to the NASD, over the 12-
calendar-month period ending 30 days before commencement of the offer,
exceeds 10 percent (40 percent in the case of 14d-1(d)) of the worldwide
aggregate trading volume of that class of securities over the same
period;
iii. The most recent annual report or annual information filed or
submitted by the issuer with securities regulators of the home
jurisdiction or with the Commission indicates that U.S. holders hold
more than 10 percent (40 percent in the case of 14d-1(d)) of the
outstanding subject class of securities; or
iv. The bidder knows or has reason to know that the level of U.S.
ownership exceeds 10 percent (40 percent in the case of 14d-1(d)) of
such securities.
4. United States. United States means the United States of America,
its territories and possessions, any State of the United States, and the
District of Columbia.
5. The exemptions provided by paragraphs (c) and (d) of this section
are not available for any securities transaction or series of
transactions that technically complies with p